I talked to several title agencies in the Metro Detroit area and all of them told me that I need a transactional funder to do double closings and assignments. Is this true? They told me that contracts and assignments were not allowed unless you can show proof of funds and had to involve a cash transaction.
First thing I would do, is find a Title Company that is more investor friendly. Sounds like the one you are using is not. No you did not need transactional funding to execute a simple assignment. All an assignment is you are transferring your rights and interest over to your end buyer. This will only work if its a cash transaction. For instance you get the property under contract with the seller for 30K and assign it to your end buyer for 5K, which will bring your buyers total purchase price to 35K. Ask other wholesalers in your area how you can get a hold of an assignment contract. It very simple and usually just one page. Hand over the original sale & purchase contract, along with the assignment to your title company and let them do the rest. Also you may want to ask your buyer for a non-refundable deposit for any reason he cant close, other than you can’t pass him free and clear title. Hope this helps! To your success from aka “Mrflippahouse"aka"PrinceofWholesaling”
In order for the contract to be considered binding, you are required to give a deposit to the homeowner. You can offer them a small amount of money (i.e., $10).
First off, you ALWAYS want to control your deals. Therefore, you definitely want to have your own title company to handle your deals. Secondly, while you may not have to post, you will need to show proof of funds on wholesale deals. Especially on any deal involving Realtors. As for the earnest money, if you have a proof of funds letter w/ your offers, you can get away w/ a very small EMD. I usually go w/ 100 bucks, though I’ve heard people can get away w/ as little as 10 bucks. The proof of funds letter gets their attention, not the amount of the EMD. Hope this helps. Good luck!
For Double closing, you will pay double closing costs. Banks used to allow the funds from the end buyer to pay for the purchase of the A to B transaction (dry closing) but increased regulations specifically related to short sales now require all closings to be funded (wet closing). This is where transactional funding comes in to play.