What Is Double Closing In Wholesale Real Estate?

In today's video, I'm going to explain to you exactly what it is when wholesaling a property and double-ending it, coming up next. If you spent any time wholesaling, you've probably heard of a double closing. If you're new, don't worry, we're gonna go over it. But essentially, a double closing is used by wholesalers to hide their fees from both parties. Is this even legal? How do you even do it? Find out right now. Really quick, before we dive in, make sure that you like and share this video with your friends. Anyone that wants to live the life they've always wanted through real estate. I'm Joe Homs, and I have over 40 years of experience as a broker, mentor, and investor. Now let's get to it. What is a double closing? A double closing means that you have a contract from a buyer— I'm sorry, from a seller, And you're the buyer, and so you open up escrow and you close a transaction. So for example, the purchase price is $300,000, okay? And then the next day I found an end user, an end buyer for this property, and so now I am going to assign this contract. In the double closing, I'm basically selling this property to them. So now I sell this property to them for $400,000. I've made $100,000 in between. Obviously, the buyer knows that he's going to be able to make more after he rehabs the property, so that's why he's buying it. So the property may be worth $550,000, I'm selling it to him for $400,000, I'm making $100,000. The reason that you do double closings is because the first closing You've made your $100,000. So the second closing is you're selling it to them for $400,000, and then there's no wholesale fee there. So they really don't know what you bought that property for originally. So again, you bought it for $300,000 and you're making $100,000. It might not make that end user happy, and the same thing with the seller, it may not make them happy, but— Each should be happy because the seller sold it for what they wanted to sell it for, and that end user buyer is buying it for the price he's negotiated. So double closings, you know, they can, they can be good or bad. It depends on who you are in the double closing. Obviously, if you're making $100,000 on a deal in between before you sell it at the end of the day, that's good for you. You know, it just honestly, it just really depends. Most of the time when we wholesale deals out, we'll literally just make, you know, $10,000 to $20,000 on a deal, and the end user, the flipper that's buying it, knows that we're making this money. It's disclosed in the transaction, so we don't normally do a double closing. When it gets up to be, you know, it's $75,000, $80,000, $100,000, then yes, we want to do a double closing just kind of really to hide that wholesale fee. Have you ever used a double closing? Let me know down below. Understanding how and when to utilize a double closing can be a savvy method for real estate investors of all levels. If you're new to wholesaling and want to see some cold calling tips, don't miss out on this video. I break down some winning tips that you can use on your next call. If you want some more one-on-one help, book some time with me. I'm always here to help.