I'm very new at this and haven't done a deal yet myself, but I think the way it works is that you find a property to purchase, and then you find a buyer to buy it from you.
After you find the property your actually locking it up via contract and as far as the owner knows, your the one purchasing the property.
Once you have your buyer then they go down with you the same day that you sign the papers for the property, and your immediately selling it to them, right then and there. Hence the back to back closures.
I'm not sure if thats completely accurate, and I also don't know why you wouldn't just assign it to them using an assignment clause. Perhaps its for properties such as bank owned REO's that won't allow you to use assignment clauses, or that want you to have proof of financial backing.
Just a guess... someone want to clear this up for us?
The only difference between the assignment and the back-to-back closing is that in an assignment only 1 transaction takes place - seller to end buyer.
In a back-to-back you are actually purchasing the property and then immediately selling it to your buyer. In the back-to-back (or simultaneous?) closing, I am not clear if two full sets of closing costs are incurred (I imagine yes), but in an assignment YOU would not be responsible for ANY closing costs.
And I believe Travis is right about the reasons you would choose this over assigning. Also, it would remove any disclosure having to be made to the seller or the buyer about the amount you would be profiting. Also, if anyone could add to this, would there be different tax implications to earning an assignment fee versus earning capital gains?
Interesting subject.
Rina
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"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
Just as Rina has explained is correct. You will most likely incur two sets of closing costs. However, these costs are completely up to the closing company. Keep in mind that most closing companies right now do not like to do double closings. The reason is all of the fraud that has happened. The government is looking at all of the closings that happen faster than, if I remember correctly, 90 days.
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well travis the resson for doing a back to back would be more money for the invester (me) if it were a really great deal but really im just trying to explore my op.at this point.
You might not have a choice though if their not allowing assignments now, back to back might be the only option. I'd still ask the title company you use if they do assignment or back to back closings. Their the ones to use on your transactions. I started my deal with one title company and then switched when I assigned it because they didn't do assignments. The investor I sold it to recommended his title company and we closed through them.
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Elena
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
well is this going to mean i'm going to need a hard money lender to buy frist from the saller then get the money back to the lender after i close with the buyer , if in that case i would need the buyer totaly locked in too <<
Hi! One of the other stundents on here told us about a friend of hers who will fund any deal up too 50 mil as long as you actually have a buyer. I can forward info to you if you like. Keep in mind you must have a buyer who is commited.
This depends on the state. For example in the state of Utah they have a good funds act that requires money from the buyer to sit in an escrow account for 24 hours. A true double closing will not work in Utah. I would have to use a hard money lender then close one day later.
You will want to check with your state and their requirements.
Elena M wrote:
You don't need a hard money lender for these, the end buyer could fund the deal also. Build your buyer's list Scott, that's the key!
__________________
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
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I'm very new at this and haven't done a deal yet myself, but I think the way it works is that you find a property to purchase, and then you find a buyer to buy it from you.
After you find the property your actually locking it up via contract and as far as the owner knows, your the one purchasing the property.
Once you have your buyer then they go down with you the same day that you sign the papers for the property, and your immediately selling it to them, right then and there. Hence the back to back closures.
I'm not sure if thats completely accurate, and I also don't know why you wouldn't just assign it to them using an assignment clause. Perhaps its for properties such as bank owned REO's that won't allow you to use assignment clauses, or that want you to have proof of financial backing.
Just a guess... someone want to clear this up for us?
Travis
The only difference between the assignment and the back-to-back closing is that in an assignment only 1 transaction takes place - seller to end buyer.
In a back-to-back you are actually purchasing the property and then immediately selling it to your buyer. In the back-to-back (or simultaneous?) closing, I am not clear if two full sets of closing costs are incurred (I imagine yes), but in an assignment YOU would not be responsible for ANY closing costs.
And I believe Travis is right about the reasons you would choose this over assigning. Also, it would remove any disclosure having to be made to the seller or the buyer about the amount you would be profiting. Also, if anyone could add to this, would there be different tax implications to earning an assignment fee versus earning capital gains?
Interesting subject.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
and also if im doing back to back would i not have to get pre Q for a loan and find closeing money or just have saller #1 do a consseion or pay back
Just as Rina has explained is correct. You will most likely incur two sets of closing costs. However, these costs are completely up to the closing company. Keep in mind that most closing companies right now do not like to do double closings. The reason is all of the fraud that has happened. The government is looking at all of the closings that happen faster than, if I remember correctly, 90 days.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
well travis the resson for doing a back to back would be more money for the invester (me) if it were a really great deal but really im just trying to explore my op.at this point.
You might not have a choice though if their not allowing assignments now, back to back might be the only option. I'd still ask the title company you use if they do assignment or back to back closings. Their the ones to use on your transactions. I started my deal with one title company and then switched when I assigned it because they didn't do assignments. The investor I sold it to recommended his title company and we closed through them.
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
well is this going to mean i'm going to need a hard money lender to buy frist from the saller then get the money back to the lender after i close with the buyer , if in that case i would need the buyer totaly locked in too <<
You don't need a hard money lender for these, the end buyer could fund the deal also.
Build your buyer's list Scott, that's the key! 
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Hi! One of the other stundents on here told us about a friend of hers who will fund any deal up too 50 mil as long as you actually have a buyer. I can forward info to you if you like. Keep in mind you must have a buyer who is commited.
Beth
This depends on the state. For example in the state of Utah they have a good funds act that requires money from the buyer to sit in an escrow account for 24 hours. A true double closing will not work in Utah. I would have to use a hard money lender then close one day later.
You will want to check with your state and their requirements.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125