WHAT IS DOUBLE CLOSE?

Double close is literally conducting 2 closes in a real estate transaction. It’s an essential strategy used by investors to insure that they don’t have to tie up their capital for a long period of time. In a double close there are typically 3 parties involved: The seller (A), the Investor (B), the end buyer (C). The end buyer is typically a cash buyer using his own cash, in some limited cases using bank loan. Once an investor has marketed the property under contract with the Seller (A) and finds a willing buyer (C), the investor then goes to title company to open 2 separate escrows to handle 2 closes.

MECHANICS OF A DOUBLE CLOSE?

The first close is the A→B transaction closing, in which the investor(B) buys the property from the Seller(A). Once the A→B is closed, the investor proceeds with the B→C transaction close in which the end Buyer (C) buys the property from the investor (B). Double closing can occur as quickly as the same day at the same attorney office; the same day at 2 different attorney offices; or over the course of 3 days at attorney offices.

DOUBLE CLOSE CONS:

1. Doing 2 different closes means paying for closing costs 2 times, as such the deal margin must be sufficient enough to absorb the costs.

2. The Investor must have the capital available for the A→B side of the transaction.

DOUBLE CLOSE PROS:

1. It helps protect large deal profits, as you get 2 separate closing documents. Because the seller and the buyer do not see both sides of the transaction statements, there’s no chance of anyone backing out as a result of discovering how much the investor stands to make.

2. It’s a cleaner transaction that actually helps legitimize your company as you build a track record of doing deals, since your company will be recorded in the county records. Any skeptical buyers and sellers will be able to find your name in county records and lend you more credibility.

HOW DOES TRANSACTIONAL FUNDING FIT IN A DOUBLE CLOSE?

Transactional funding facilitates a clean double close. Given the short turn around of both A→B and B→C, transactional funding provides the capital that is needed to close first part of the transaction. Whatever your transactional funding needs, we’re here to facilitate the funding that you need on the A→B side of the transaction by providing you with the lowest rate transactional funding.

Summary

Step-by-Step Transactional Funding Process

1. Wholesaler Secures Buyer & Closing Date

   • Once the wholesaler (WS) has a buyer lined up and/or a closing date set, they contact us to secure transactional funding.

2. Introduction to Title Company

   • WS introduces us to the title company handling the closing.

3. Loan Document Preparation

   • We reach out to the title company to gather the necessary information.

   • We prepare the loan documents and send them back to the title company.

4. Wire Transfer Scheduling

   • Once we receive the title/attorney wire instructions, we schedule the funding.

5. Funds Arrive Before Closing

   • Our goal is to ensure the funds arrive at the closing office at least 24 hours before closing to keep the transaction smooth and stress-free.