If I were to wholesale a deal to another investor, the simplest method would be to do an assignment. However, the seller and the buyer would know exactly how much I am making. This would not be a problem if the assignment fee is low. How ever, if I am making a big profit, generally that will cause problems for both buyer and seller.
I have heard that you can do a simultaneous closing, but when I called the title company to get more information about it, they said that simultaneous closing are forebidden in Texas. Is this true? Has anyone done any simultaneous closings in Texas? How much cost would I incurr if I did a simultaneous closing? How can I pass the costs to my seller and buyer so that I don’t have to put out any out-of-pocket cash?
I understand that a simultaneous closing is performed when the property is titled to me, then to my buyer at the same time. Would I have to pay for appraisal or survey or can I pass this cost to my buyer? Would I have to pay for a title policy, transfer tax, and recording fees or would this have been satisfied when the seller paid for these costs? I’ve gotten mixed responses. Some say that my closing costs are doubled because I just closed on two transactions. Others say that the buyer and seller incurrs the costs and I walk away without paying any out-of-pocket cash.
There is nothing illegal about buying a house and then selling it the same day for more money. It can close the same day or you can even close with your buyer before the purchase. Everything is held in trust by the title company until you close on your end. If done right the only extra costs would be for the title company to to handle the closing and the extra deed to an attorney. Your buyer would pay survey, inspections loan costs while seller usually pays title policy. Your out of pocket expenses which are actually out of closing proceeds and not paid up front should be less than $300. If i can help more pls let me know
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
Simultaneous closes are perfectly legal as Ted mentioned. Keep calling title companies until you find one that’s experienced with them.
The only risk of which I’m aware with double closes is possible seasoning issues depending on the lender you’re buyer is using and what type of program it is. Personally, I’ve only run into it once in the last couple of years (don’t do that many this way), but it only caused a week delay.
I have heard it’s becoming a larger issue, but like I said, I haven’t heard that from many.
It doesn’t matter if the buyer know’s what your flip fee is as long as you aren’t taking so much out of the deal that it ceases to be a good deal.
If you can wholesale a property to me and make 10k, good for you. I don’t care as long as the lion share of the profits are still on the back end. If you’re going to make 10k for the flip, there better be at least 25k or more on the back end for me since I’m the one taking all the risk.