Hi everyone,
I’m new here at this site and I was wondering if anyone has done a double closing and if so can you give me some advice on doing them?
Thank you so much.
Rochester
I have done a lot of double closings!
First A double closing is when I buy and contract a property, then I find a end user buyer (A second buyer) where I use the money through the second buyer to fund the purchase from the first seller.
We only have title a few minutes and simultaniously close both deals where I as the investor pocket the spread from the first purchase and the end buyer.
These types of transactions are illegal in roughly half of US states. The only way to determine this is to contact a number of Escrow, Title or Attorney Closing companies and inquire whether they can and will do double closings. (Some of the states that allow double closings are Arizona and Nevada.)
If you’re state allows them, or the state you are investing in allows them? Your set!
These are entirely different transactions, both have inspections, loan contingencies, and appraisals.
You can not list the property for sale with a realtor to find your end buyer, because until you close, you do not own the property.
You may however use any online ads, bandit signs, craigs list, your buyers list, and referals, etc. to find your end buyer!
Make sure you have some access to the property once you get your contract signed in order to show the property to potential end buyers.
A property that is vacant is always best, because to try to coordinate with a owner occupied homeowner is hard to do, and if they (Your Original Seller) finds out your selling it in escrow, it can sometimes cause friction!
The title company prepares closing documents and coordinates signings by all parties. The closing fees for each transaction are almost identicle with the exception of an “Open Title Policy” is partially paid for in closing one and balance paid for in closing two. (End Buyers)
The first transaction may or may not require a very short term “Homeowners Insurance Policy” to close. Whether this is a requirement depends on the state your in, and the law concerning closings in that state. (It only costs you the set up and one day pro-ration if it’s required.)