I was talking with a realtor today here in FL about selling properties to other investors (wholesaling) and I mentioned that I was looking for a good title company or real estate attorney that can do double closing/ simultaneous closing. She said this is illegal!!! I have read this but recently heard from a Guru that it was possible to do this to save the cost of getting transactional funding. So is it illegal in FL?
If so are there any other ways to close wholesale deals without doing an assignment of contract or using transactional funding here in Florida? :help
Double closings are illegal in over 30 states, the states who have not specifically created laws banning this practice still discourage the practice. It has become difficult to find a title / escrow company that still allows this let alone finding a closing officer willing to do it and experienced in the practice!
Don’t get cheap and miss the forest through the tree’s as the 1 to 1.5% cost of transactional funding is minor if you make 9 or 10% in the deal. ($10,000 per $100,000 of value for transactional funding deal transactions)
GR! Its so nice to hear from you! Thanks for the reply. If they aren’t illegal in FL I wonder if real estate attorneys would do them? If not, like you said I’ll go with last resort of transactional funding. Your absolutely right. No sense in tripping over the dimes to get to the dollars$$$. Thanks again GR.
Hello BradenMan,
Double closing are NOT illegal in Florida, but what has become illegal is the use of the B-C buyer’s funds to close on the A-B. For Double closings, transactional funds must be used or your buyer must agree to have their funds used for your closing.
TheTitleGuy: so i have a purchase agreement with the seller to buy at $50k and an assignment of contract with the end buyer for him to pay $80. or should i use a purchase agreement with the end buyer? then i take both documents to the title company and tell them what? where should i include my $30k assignment fee? And should each party pay their own fees for closing. This is in Miami,Fl.
That’s not a double closing, thats an assignment of contract. The end buyer shows up at settlement and purchases directly from the seller. You pocket a $30k assignment fee. Talk to your title agency on how they usually process these deals.
Hey guys I hate butt in here but I just posted the following in the “Foreclosure, Short Sales” forum:
"As many of you have wondered or are wondering…
How are investors getting paid now with short sales with all of the GSE’s rules?
I’ve successfully negotiated short sales about 3 years ago (before all of Fannie and Freddie’s rules). My question is: “How can I get paid now?” I have put under contract a several short sales and its occured to me that I need to find a viable exit strategy. I can no longer use the end buyer to fund the transaction.
I believe I have to pay CASH now, is this correct? (A-B and B to C)
Can you guys please share what you guys are doing to get paid (other than being licensed?)
Now… I have heard of Transactional Funding… How does it work? Is this the same as having a rich investor (like investors have) on your side and funding deals for you?
Also, I forgot to ask. Is it possible to STILL get paid via “assignment” fee? Has anyone here ever done it???
I’m not trying to avoid transactional funding, I’ve just never done it before. I guess I should look at Jason “The Money Man” Medley at iVisionary. I know there a few companies. Wow do you guys recommend.
Please, only responses from investors that have used transactional funding please!
Oh S**t, what about the 30, 60, and up to 120 day rules??? How does transactional funding fare out? HELP GUYS!!! :banghead
First of all when I was a new investor back in the stone ages of 1979 / 80 there was verbal and written reference to "Double Closing's and to Simutanious Closing's" they have been co-mingled and interchanged in conversations for a long time! One means to use your end buyers money (B-C) to close your (A-B) purchase and the other refer's to doing a (A-B) closing then closing to your end buyer (B-C) usually using cash or transactional funding!
However they have been interchanged so frequently that I am not always sure which someone is talking about, using your end buyers money to close your purchase is illegal in 30 states or so and the balance of states discourage the practice, but this process was refered to in the early 80’s as “Double Closing” in fact it is written in my 1981 / 82 real estate investor education package obtained through and created by Russ Whitney!
But today most investors refer to “Double Closing” as using cash or transactional funding and “Simutanious Closing” as using end buyers money to make your A-B purchase! They are so intertwined that I still am not always positive of the real question using either term!
Now when making a “Short Sale” purchase it can not be assigned as it has to be closed in “Contract Buyers Name”! And make sure the lender does not write a provision prohibiting re-selling for 30, 60 or 90 days as no title or escrow company will close a new escrow during this written period!
So you have to use transactional funding or cash only to close a Short Sale Purchase!
That has got to be the most honest “no nonsense” piece of advice I have received in a very long time. Thank you Gold river.
It makes perfect sense. Simultaneous are “back-to-back” closing using the end buyer or retail buyers money (B-C) to close your A to B closing.
Double closing is, well, just what it states a double closing. Two closings, that is. Nice. I understand now!
Now that that’s cleared up, I’ll need to double-close and use Transactional Funding to fund my A to B. Then, I close with end-buyer/retail buyer. Is this correct? :beer