Double closings – not to be confused with assignments – aren’t as complex as they seem.
Simply put, a double closing is the simultaneous purchase and sale of a property that involves three parties:
- The seller
- The investor
- The end buyer
It’s essentially two transactions commonly referred to as the “A to B & B to C” strategy and looks like this:
- Person “A” is the distressed/motivated seller
- Person “B” is you, the investor
- Person “C” is the end buyer.
During the “A-B” first transaction, you’re buying the property from the seller. And then right afterward – in the “B-C” second transaction, you sell the property to your buyer. Need clarification on the wholesaling process? Read my recent blog on selling a house fast!
So what do we know about double closings? Are they “good” or are they a total pain in the backside?
My answer? A little of both…
The good news with double closings is that your financial privacy remains intact, at least initially, and that’s what matters.
Only you know how much profit you’re generating from the deal. See, although your end buyer knows you’re making a profit, sometimes they can get a little iffy or uncomfortable if they know it’s a substantial profit. (Yes, I’ve seen it happen.) Say, anything over $10,000. So, if you’re going to be making that kind of profit, this method is great.
But where there’s a positive, there’s almost always a negative…
The downside with double closings is that you have to work with two different sets of closing costs and sometimes two different closing agents.
Is that reason enough to NOT do double closings?
Absolutely not.
If the deal makes sense – even if you have to cough up two sets of closing costs to proceed – it’s still worth it.
Another potential stumbling block with double closings is that you have to have the money to buy the property and complete the first transaction BEFORE you can carry on with the second transaction.
However, a few years ago I developed a program that gives investors the opportunity to use $600,000 of my money for their wholesale deals. Then, there are NO FEES for using the money making it easy and inexpensive to complete those A to B transactions! I know it may sound too good to be true but I assure you it’s not.
>> Click here to learn how to get access to $600,000 in No Fee Funding today!
Tips about Titles
With double closings, you’ll need an investor-friendly title company – one that’s done business with investors before and knows how we operate.
And, these simultaneous transactions sometimes actually require inviting two title companies to the party.
Why?
Because you may have a title company you know and trust, but the bank (seller) may insist on using another one. But again, don’t let that stop you from moving forward with the deal if it’s a good one.
Working with one title company is obviously easier, so whenever possible, use a single title company. If you don’t know any reputable and reliable investor friendly title companies, get a referral from fellow investors or from us. We’ve worked with hundreds all over the USA.
Since we’re talking about title companies, I want to briefly mention the actual title of the property…
It’s in your best interest NOT to take the title in your own name because that helps you avoid unnecessary risk. Rather, make the offer in the name of your Corp. or LLC, and sign the contract as President or Secretary or Member. All of that helps protect you.
Save the Stress: Don’t Attend the Closing
Listen to me now, friends…
You do NOT need to attend closings.
For starters, they are a snooze fest. Secondly, attending closings leaves the door wide open for you to say the wrong thing, or worse – say too much. Don’t risk destroying your deal. Don’t go.
Let me explain…
See, way back when, I was about to close a deal that would put $360,000 in my pocket. (No, that’s not a typo, and no, I didn’t add an extra zero by accident.)
Against my better judgment, I let my attorney talk me into going to the closing. Everyone came to the table, papers were everywhere, and all I could focus on was a file folder with my name on it because I know that inside that folder was my big, fat check.
Long story short, the closing agent fumbled and stumbled and couldn’t find the necessary documents to close for what seemed like an eternity. She almost called the meeting and rescheduled, when (sigh of relief) she found what she needed – thankfully, before I went into full-on panic mode and opened my mouth.
But in the meantime, I seriously almost had a heart attack! It was so unnerving that I swore I’d never go to another closing again… and I haven’t!
Closings can cause investors unnecessary stress and provide a terrible opportunity to say the wrong thing – so take my word for it and stay home.
After all, that’s why you have an experienced closing attorney and/or title company to handle all of that for you – and for a good reason.
Heads Up!
A few important final notes…
Be aware that some title companies may say double closings can’t be done. They’re wrong.
Double or simultaneous closings are absolutely legal and happen every day. So, you may have to walk some companies through the processes. However, as I mentioned before, my advice to save you time, hassle and stress – is to work with title companies that have experience with double closings.
In my opinion, double closings are clean and simple, and their advantages far outweigh the fact that you may have to pay a bit more in closing costs. But that’s a price well worth paying, considering that you don’t need to sit through your closings and can quickly close a deal.
Also, remember that every state has different laws (and they’re constantly changing), so understand your state’s requirements before you dive into a double close – or, better yet – let the experienced Closing Attorney or Closing Agent handle it to make sure everything is done above board and you’re protected.
One last thing on the funding we provide for our clients… We’ve funded more deals that you can imagine and REALLY know what we’re doing. So, when we’re involved, you literally have my team on your team and we help make your deals go as smoothly as a baby’s bottom. There’s no doubt that this kind of professional oversight is invaluable to our clients.
Leave a Comment Below
Let me hear about your experiences with double closings. Feel free to share a comment or tip below.
Hello Cameron,
Nice blog, it keeps my brain on the process of a double close plus an assignment.
Thank you,
Ronald Goode
why do you have to have money to close on AtoB-transaction. Do you mean a bridge loan? Would you, please, explain…
Also, pls, provide details about using a 2nd escrow company. is there anything you should pay attention to? I’ve never done it… always used one.
From what I have heard & done, in double escrow the B-investor uses C-buyer’s money to pay to A-seller and to B-himself?
Using the C buyers funds to close the A to B transaction is how it used to work. Now, if you want title insurance, using the C buyers money is typically prohibited.
On a 2nd closing agent, that will typically only come about when you’re buying from a bank and they insist on using one that you would rather not use for the B to C. Not every closing agent will do double closings so if you’re buying from a bank and their preferred closing agent won’t, you’re going to need a 2nd to handle the B to C. Not a big deal if we’re funding for you because we will help manage the process.
I hope this helps.
Cam
Very powerful, and much needed in todays real estate world. I’ve been following you Cameron since your beginings with Ron, and I have to say you are one of the best, and most honest trainers in the business. I love your NO BS approach to real estate. Keep up the good work ..Be Blessed
Thanks Cam! Always nice to get a refresher course on the various processes involved in completing a deal.
Do you fund a purchase and rehab for sale after the rehab?
No we don’t. We only do same day/next day “transactional funding” for wholesale deals.
Cam, it is my understanding that “double closings” and “simultaneous closings” are different only because of one thing.
I, then am curious why you say that there are the same. In your explanation of a “double close” indicate that they are the same.
Please explain.
As far as I am concerned, they are the same thing. How much time lapses between the 2 may vary and then one could argue that if they didn’t happen at the same time and (say) an hour lapses between them, then it would be a double closing not simultaneous. We don’t care. If they happen on the same day or even the next day, we consider them a simultaneous or double close.
You getting your paycheck is what matters. Nomenclature doesn’t matter much to us.
Cameron
Good info
A title company in Ohio
That B has disclose to C
Your profit.
Used to be Did not have to disclose.
Now they say full disclosure.
Pat
Calling BS on that. Find another Title Co. There’s certainly no shortage of them.
Hey Cameron I do business in San Diego. Do you do transactional funding here? & if so how do I go about moving forward with you on that?
We sure do Matt. Give my office a call at 607-936-2200.
Hi Cameron, I am here in California and would like to know if you are still offering transactional funding for “simultaneous close”. Also do I need transactional funding if I am doing an assignment or selling my contract to the “c” buyer. I havent been able to get any clear answers on this.
Joshua – yes we sure do offer transactional funding and with no fees!
No you don’t need funding when you’re doing an assignment.
Very good info Cam, I taking note, I haven’t done any of this yet.
Great read! Thanks Cam!
My title company in NJ is telling me that I need to let the seller in an A to B and B to C transaction that I am selling to the B to C? Is that correct
Not to my knowledge.
We can refer you to a closing agent in NJ that we use ALL the time. They’re excellent. Please call my office!
This information is very helpful. Thanks Cam.
How do I go about double closings in NYS? I called a title company today and the lady seemed completely lost. She said I would have to go to an attorney for escrow and double closings.
Bobby, you’ll definitely want to do all your Real Estate closings, including double closings, with an Attorney in NY.
Hi Cameron. This info is very helpful to me, asd I am a new RE investor and have herard some negative opinions about double closings (e.g. as not transparent or ethical). I also am surprised that I do not need to attend the closing(s), but you provide excellent reasons not to. Thank you!
I need an investor friendly title company in the Marin or Sonoma counties of California to handle double closings
Happy to help. We have many in CA that we’ve worked with and can recommend.
Please call my office and we’ll be happy to provide it. 607-936-2200
If you have the “C” buyers funds in escrow, you need transitional funding. You close with the “A” seller and then close using the “C” funds. At least in AZ, you can close this way.
In general, if you want a title insurance policy, you are prohibited from using the “C” buyers money to close the A to B transaction. I certainly do, even if my entity only owns the property for a matter of minutes or hours.
If you are closing with an attorney, you might have the option to protect yourself from a title defect with his/her Errors and Omissions Insurance. That may be acceptable to you but the issue is having no coverage when the attorney no longer practices law and there for has no need for the coverage any longer. Anecdotally, a lender typically will not accept E&O as an equivalent.