Double Closes

Banks usually put a term in there contract that there contract is not assignable there for we as wholesalers usually perform the double close method. You would usually get the double close process started once your offer gets accepted. But heres another strategy that would save you money because when doing a double close you have to pay for the funds from a transactional company which cost from $2500-$3500. You can just create an LLC and make offers on with the LLC name and when you get an offer accepted you can just sell your LLC to the buyer and he would close on the property. You can get an LLC from LegalZoom Dot Com, they charge around $320 and they even offer 3 monthly payment plan.

Thank you Ray, so what I'm getting from this response is since im working wit is an REO which is a bank owned property. With a double close the bank is only seeing one person closing and buying the property, hence they don't have to worry about a third party not going through with the transaction, and them not getting rid of the property from their books? Am I understanding that right? Isn't that why they don't like assignments? Because they done want to deal with several parties since there's more chance of a deal falling through?

To post each question twice. Seems like rob and ray gave a good answer to your question though. Best wishes!

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Well, there are two ways to do it: assignment or double closing. In this article, I will discuss each one.

First, let's look at how an assignment might work. You find the deal and put it under contract to purchase it from your seller. In the purchase contract, you negotiate the right to assign your contract. Then, once you find your investor buyer, you fill out an assignment of contract form and help facilitate the closing of the deal with your seller and your buyer. Often, but not always, you are paid an assignment fee at the closing. Sometimes it's classified as a fee to clear title.

Some of the advantages of this are that you are not actually closing on the property yourself when you assign it. You do not need to get a loan or have the cash to purchase the property. Also, if your seller and your buyer agree and cooperate it can be a very smooth transaction. Since you are not closing on the property yourself, you can save yourself some transaction fees. And, another big benefit is that you never appear on title or public records as having owned the property.

What are some of the disadvantages? In many cases, the buyer and seller each know how much you made wholesaling the deal. For some people this can be an issue, especially if the amount you are making as a wholesale fee is considered large. Of course, you can try to work with your title company to have separate HUD statements. Some may do this while others will not.

Now, let's look at how a double closing might work. In this case, you do the same thing as in the first example except that instead of assigning the contract to your buyer you get a contract to purchase from your buyer that is contingent upon you having clear title to sell the property to them (in other words, provided that you can first close on the deal yourself). Then you go ahead and purchase the property and usually later that same day, you sell the property to your investor buyer. The mechanics of how this exactly works can vary quite a bit, particularly in the specifics of how the funding works. Some people try to do it with the funds from your buyer. Some insist that it must be funded with your own cash or loan and then you can get that all back hours later when you sell it to your buyer.

Any way you look at it, there are extra expenses doing it this way and you, or the entity you are using, appears on title. So, why would you want to consider doing it this way? Sometimes, it is the only way to get paid. If the buyer has restrictions from their lender on paying assignment fees or fees to clear title, you may need to do a double closing to make the deal work. Another very common reason is that you don't want the seller or buyer to know that you are making a very large wholesale fee on the deal.

In general, if possible, I much prefer assigning contracts over double closings, but there are occasions when a double closing makes sense and should be used. Of course, you may want to check with your legal adviser to discuss issues particular to your situation and your local real estate laws. jorr

From time to time I talk to support and find out where the market hot spots are at the time. I want to work in another part of the country. I am not real comfortable in person and think that the computer may be my best route to success. My question is, do you travel to the area that you are interested in and look for a team? I have attempted to do this online and it seems that I am not taken very seriously.
I know that I need a realtor, contractor, closer, investor buyers. But how do I find them? The other thing that makes me think that I need to visit the area we (I have a partner)want to work in is knowing what areas of the city are good neighborhoods.
I want to work in my pajamas and have been assured that is very possible, but I just don't have a structured plan to set things up.
Any suggestions would be much appreciated.
Thank you,
Ruby and Debby

On store link at top of page. Profit from real estate right now and 30 days to fast cash are 2 great books that have answers to almost all of the questions that you can think of concerning starting to invest (anywhere).
If you still have questions, continue to ask them in the search bubble in upper left side of screen. I found that by having Dean's books in front of me I can go back over information at any time (anytime of day). Also, look into joining real estate investment associations wherever you plan on investing. Soon your profits can cover the member fees for joining them. Associations are other platforms where you can ask, learn, and put forth action.
Key members of your 'away team' should be:
1) Real Estate Attorney
2) Escrow Company
3) Title Company
4) Real Estate Broker/Realtor.
Of course, as you profit and gain real estate that you keep for yourselves (if you so desire), you will add a handyman or contractors to your away team(s) to help with property improvements. A trusted and valued attorney could oversee processes (the real estate attorney(s) that you have interviewed to be a part of your "away team"). Your chosen Broker/Realtor could oversee processes.
The most important thing is research, research, research! See this site for real estate contracts, then be sure to bookmark them for quick references. Also, your chosen attorney(s) can help write contracts (if needed) in your investment areas. Have different teams in each part of the country you invest in, unless your escrow or title companies can assist you wherever you invest in real estate.
To Your Freedom,
To Your Success,
Anthony

Hey Randy,
This post is very well written (clear and understandable) AND it has great information.
Thanks,
Anthony