You might not be able to close your wholesale deal if you are using the double close.
What is the double close?
The double close is when you close with the buyer in one meeting and then close with the seller in the next. This blog post mentions that you use the funds from the buyer to close with the seller.
You might not be able to close your wholesale deal if you use the double close because some lawyers will not understand that it is a legitimate wholesale strategy and believe that there is fraud taking place. You might not be committing fraud. I think you should sell the contract, not the real estate.
The lawyer might be right about it not being a legitimate strategy in some jurisdictions because wholesaling seems to be a massive grey area across the United States. There is good reason for lawyers to be so concerned with fraud. I just saw on Bloomberg a scandal featuring fraudulent luxury home buyers where the transactions went through in Florida.
When I was a mortgage broker I was told that the closing lawyer might interfere with the closing of my deal. This could happen to you.
Why not use an Assignment Fee?
Assignment Fees are a second type of closing for wholesale deals. I haven’t heard any complaints about wholesalers using this strategy. With the Assignment Fee, you collect a deposit upfront and then collect the remainder of the Assignment Fee when the buyer closes with the seller. Use the diagram in this post to help you clarify the process.
What have been your successes or failures with the double close?