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of the Funding

Double closing is a popular strategy used by real estate wholesalers to facilitate transactions without using their own capital to purchase properties outright. In a double closing, the wholesaler acts as an intermediary between the property seller and the end buyer, executing two separate transactions: one to purchase the property from the seller and another to sell it to the buyer. These transactions are usually completed back-to-back on the same day or within a short time frame. This method allows wholesalers to maintain privacy about their profit margins since the seller and buyer are not privy to the details of each other’s agreements. Double closings are ideal for deals with significant profit potential or when the wholesaler wants to avoid assignment fees that might raise concerns with buyers.

To successfully execute a double closing, wholesalers typically rely on transactional funding, a short-term loan used to finance the initial purchase from the seller. This funding ensures the wholesaler has the necessary capital for the first leg of the transaction without requiring personal investment. Once the property is purchased, it is immediately sold to the end buyer, with the proceeds used to repay the transactional funding. Double closings require careful coordination with title companies or attorneys to ensure both transactions are seamless. While this approach offers increased control and privacy, it also involves higher costs, such as closing fees for two separate transactions, making it essential for wholesalers to calculate their margins carefully to ensure profitability.