I have a current deal in San Diego, CA. I have read several different scenarios on how to successfully flip the property to an end buyer, using an A to B to C type of strategy. I am trying to find out what is the best way to flip this house, I am currently looking at doing a Double Close, or a simultaneous close, but I just got off the phone with First American Title Company, they are the bank’s choice. They told me that the bank probably will not go for it because we have to have full disclosure, and the bank won’t want us to sell it for a higher price. The manager there did say they do that type of transaction, but once again the bank might put a stop to it.
If you double close, meaning you take title of the property and then turn around a few minutes to hours later, they no longer own it and cannot tell you what to do with the property. Do you have your own title company? TampaSteph on here usually has the banks’ title company fax a copy of all docs to her title company and closes with her buyer there. Ask the banks’ title company what they mean by full disclosure. Full disclosure of what? You are buying and taking title after that it’s none of their business.
Simultaneous close and double close are two different things - as I understand it.
I think if you plan to do a simultaneous close then you have to have full disclosure.
if you do a double close then you dont have to have it disclosed since you will in a few hours flip to your buyer which at that time you will legally own the property.
Someone correct me if I’m wrong.
Like Vittorio said- If you are going to do a double close, and use your own funds (or transactional funding) to fund the A-B transaction, then there should be no problem with disclosure.
Doing a simul close (using your buyer’s funds to fund both transactions), is a different story. That is how I close all of my REO deals, but I close them at my own title company. There is full disclosure to my buyer, but since the bank is not a client of my title company (they are being represented by their own title co), my title co does not have a fiduciary responsibility to the bank, and therefore they do not need to disclose to the bank that we are using the funds from the B-C transaction to fund the A-B transaction…
Wow. That sounds really confusing, now that I go back and read it.
Bottom line is- if you are not planning on using your own funds for the A-B, then you are probably going to run into problems, unless you already have a title company lined up who will do simul closes.
Ya I would be using transactional funding, but the title company is seller’s choice…we are using First American Title…the lady I was speaking with seemed to be unfamiliar with the double close and kept referring to a simultaneous close, one she said the banks would have a problem with because we are re-selling it for a higher value…
So my questions are: How do you approach a double close, without having your own title company?
How do you explain the double close to the Escrow Agent, so she gets what we are doing and we can be 100% assured we can do it?
Would adding a party to the contract be easier, or any other method for that matter?
Does anyone by chance have an actual example just like mine?
Is there something I need to be looking for in the banks revised docs, that either permits me to do this or not? I didn’t see anything, but then again there is a lot of legal jargon…
Not really the seller’s business. If they wont do a double close, have your buyers policy done elsewhere, then double close through the other title company.
I have done several double closes on bank deals, even with First american heritage title co, turned around the same day and sold them. The seller has no real right of say on anything you do with a property you own.