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How to get money for real estate double closing

Real estate double closing is a strategic investment technique that allows investors to profit from quick property transactions. However, one of the key challenges faced by real estate investors is securing adequate funding for these double closing deals. In this comprehensive review, we will delve into the various methods and strategies to obtain the necessary funds for real estate double closing transactions in the US market.

I. Traditional Financing Options:

  1. Conventional Loans: Traditional bank loans can be a viable option for real estate double closing investments. These loans typically require a down payment, good credit history, and a consistent income. However, the lengthy approval process and stringent requirements may not be suitable for time-sensitive double closing deals.

  2. Home Equity Lines of Credit (HELOC): HELOCs provide investors with a revolving line of credit secured by the equity in their primary residence. This flexible financing option allows investors to tap into their existing home's equity to fund real estate double closing transactions. However, it is crucial to evaluate the risks associated with leveraging personal assets.

II. Alternative Financing Methods:

  1. Hard Money Loans: Hard money lenders offer short-term loans based on the collateral value of the property being purchased. These
A Double Closing is the simultaneous closing of two separate Purchase and Sale Agreements involving three parties – a seller, a real estate investor, and an end buyer. The sale of the property to a third-party investor is referred to as the Acquisition Escrow.

What is the double close method?

A double close is a type of real estate closing transaction that involves 2 closings, one between the seller (A) and the middleman (B) (or wholesaler), and a second between the middleman (B) and an end buyer (C). All this takes place on the same day, sometimes the same hour. (A) sells the property to (B).


Is double closing considered wholesaling?

In wholesaling, a double closing is two separate yet simultaneous purchase and sale transactions on a home. The homeowner first sells the property to the wholesaler, who turns around and immediately sells it to the end buyer—often on the same day.

How does a double escrow work?

Double escrow is a set of real estate transactions involving two contracts of sale for the same property, to two different back-to-back buyers, at the same or two different prices, arranged to close on the same day.


What is the 2 rule in real estate?

The 2% rule is the same as the 1% rule – it just uses a different number. The 2% rule states that the monthly rent for an investment property should be equal to or no less than 2% of the purchase price. Here's an example of the 2% rule for a home with the purchase price of $150,000: $150,000 x 0.02 = $3,000.

What does a double close mean in real estate?

A Double Closing is the simultaneous closing of two separate Purchase and Sale Agreements involving three parties – a seller, a real estate investor, and an end buyer. The sale of the property to a third-party investor is referred to as the Acquisition Escrow.

What is the double closing strategy?

A double closing is an alternative wholesaling strategy to the wildly popular contract selling method. More specifically, however, double closings will witness an investor actually purchase a subject property, only to turn around and sell it fairly quickly—hence the name double closing.

Frequently Asked Questions

What is a double closing called?

A double closing (also known as a simultaneous closing) works by coordinating two transactions among three different parties: a seller, a wholesaler, and a buyer.

What does Alta mean on closing statement?

ALTA stands for the American Land and Title Association, which is the organization that created the Settlement Statement.

What is the difference between HUD and Alta?

ALTA statements are comprehensive and used in commercial transactions, while HUD statements are regulated by federal law and used in residential transactions. Understanding these differences is crucial for buyers, sellers, and real estate professionals lenders to ensure smooth and compliant real estate transactions.

Is an alta statement the same as a closing statement?

It is also used in a mortgage refinance to list all the charges. Other common names for it are ALTA statements or a closing statement, but not to be confused with a closing disclosure or a seller net sheet. HUD-1 Settlement Statement was similar but is no longer used in that form.

What is the difference between a settlement statement and an alta settlement statement?

ALTA Settlement Statement Cash – This is the version used for cash transactions for property purchases. Settlement Statement – This is the version used specifically for the buyers in the real estate purchase and contains only information pertinent to the buyer's side of the transaction.

What is a debit on an alta statement?

At first glance, you will see all the logistics of the transaction. Then, you will find the two columns that count…a debit and a credit column. The debit column is money you will be paying out, and the credit column is money coming in or a fee that has already been paid.

How does a double close work wholesale?

A double close involves purchasing a property wholesale and then “flipping” the property to an investor that same day; thus the double closing -- the wholesaler's closing is nearly simultaneous with the end buyer's closing. You only hold the title for a quick minute!

What is a double close in wholesale real estate?

A Double Closing is the simultaneous closing of two separate Purchase and Sale Agreements involving three parties – a seller, a real estate investor, and an end buyer. The sale of the property to a third-party investor is referred to as the Acquisition Escrow.

What is the double closing structure?

A double closing enables a wholesale investor to protect their profit by keeping the purchase and sale as separate transactions. This prevents either the initial seller or the final buyer from knowing the profit margin and feeling taken advantage of.

FAQ

Can you double close a short sale?
It used to be that a short sale flipper would utilize a double close where they buy the house and sell the house the same day or within a few days. This is still allowed under the CFPA but it becomes very difficult.
What is the 70% rule in wholesaling?
Basically, the rule says real estate investors should pay no more than 70% of a property's after-repair value (ARV) minus the cost of the repairs necessary to renovate the home. The ARV of a property is the amount a home could sell for after flippers renovate it.
What is the Alta title policy?
In California, there are two types of title insurance policies. The CLTA (California Land Title Association) policy insures the property owner and the ALTA (American Land Title Association) is an extended coverage policy that insures the lender against possible unrecorded risks excluded in the CLTA policy.
Is Alta the same as settlement statement?
ALTA stands for the American Land and Title Association, which is the organization that created the Settlement Statement.
Is an alta the same as a closing disclosure?
Where closing disclosure is exclusively used by the buyer (or borrower for transactions that involve a mortgage), an ALTA settlement state is given to both the agents, brokers and consumers on both sides of the transaction. It's almost like a receipt that both parties acknowledge during the real estate closing process.
What is the difference between assignment and double closing?
Or their attorney the contract between you and a seller that's why the double escrow is used when people have a huge spread between the price they're buying a deal for and the price they're selling a
What is the difference between simultaneous closing and double closing?
A double closing (also known as a simultaneous closing) works by coordinating two transactions among three different parties: a seller, a wholesaler, and a buyer.
What is double contracting?
An arrangement where an employee has two employment contracts with different employers (usually in the same group), covering the whole of their working time.
What is the purpose of a double closing?
Real estate investors often utilize a double close to keep their profits private from both the seller and the buyer. The key to the double closing is that it's two separate transactions – one between seller and wholesaler and another between wholesaler and end buyer.

How to get money for real estate double closing

What is a double closing contract? A Double Closing is the simultaneous closing of two separate Purchase and Sale Agreements involving three parties – a seller, a real estate investor, and an end buyer. The sale of the property to a third-party investor is referred to as the Acquisition Escrow.
How do you double end a real estate deal? When a buyer purchases a home directly through the listing agent, rather than through their own buyer's agent, they enter into an arrangement known in the industry as “double-ending.” The term refers to the fact that there are two “ends” or halves of a commission on a real estate deal.
How does a double closing work? A Double Closing is the simultaneous closing of two separate Purchase and Sale Agreements involving three parties – a seller, a real estate investor, and an end buyer. The sale of the property to a third-party investor is referred to as the Acquisition Escrow.
Which states allow double closing? Double Closing by State

A double closing is legal in California.

How do you double close real estate? In the simplest form of double closing, the purchaser would pay the purchase monies to the middleman and they would complete a settlement statement (HUD-1) for their transaction. The purchaser would have to wait while the middleman uses most of the purchase monies to purchase the property from the seller.
Is Alta a closing disclosure? Where closing disclosure is exclusively used by the buyer (or borrower for transactions that involve a mortgage), an ALTA settlement state is given to both the agents, brokers and consumers on both sides of the transaction. It's almost like a receipt that both parties acknowledge during the real estate closing process.
What is the meaning of Alta in HUD? ALTA (American Land Title Association) and HUD (Department of Housing and Urban Development) statements are both documents used in real estate transactions, but they have key differences. Firstly, ALTA statements are used in commercial transactions and are more detailed, and prepared by title companies or attorneys.
What is an alta policy of title insurance also called? In California, there are two types of title insurance policies. The CLTA (California Land Title Association) policy insures the property owner and the ALTA (American Land Title Association) is an extended coverage policy that insures the lender against possible unrecorded risks excluded in the CLTA policy.
What does the Alta stand for in settlement? The American Land Title Association

What is a ALTA Settlement Statement? ALTA is the American Land Title Association and the ALTA Settlement Statement is a standardized form that itemizes the debits and credits for the buyer and seller in a real estate transaction.

  • What are the cons of a double closing?
    • Disadvantages of a Double Closing

      The biggest disadvantage of a Double Closing is timing and the reliance of three parties to perform rather than just two. If the buyer or original seller backs out list minute, it affects both transactions.

  • Are Alta and HUD the same thing?
    • ALTA statements are comprehensive and used in commercial transactions, while HUD statements are regulated by federal law and used in residential transactions. Understanding these differences is crucial for buyers, sellers, and real estate professionals lenders to ensure smooth and compliant real estate transactions.
  • What does Alta mean?
    • High, elevated

      If you know baby is going to reach for the stars, the name Alta will suit them perfectly. This gender-neutral title has Latin origins and means “high, elevated.” Alta works as a stylish stand-alone name but may be a shortened version of Altagracia, meaning “high grace,” referring to the Christian Virgin Mary.

  • How do you double close a wholesale deal?
    • A double close involves purchasing a property wholesale and then “flipping” the property to an investor that same day; thus the double closing -- the wholesaler's closing is nearly simultaneous with the end buyer's closing. You only hold the title for a quick minute!
  • How fast can I close a wholesale deal?
    • The end buyer will proceed to close the deal with the original seller. Once closing is complete, you'll receive your assignment fee. This entire process can happen quickly, sometimes in as little as a few days, making wholesaling an attractive real estate strategy for many.
  • Is a single or double close better for wholesale deal?
    • Whereas most wholesalers favor the contract assignment method, it's in their best interest to have a backup plan: the double closing. Otherwise referred to as a double escrow, a double closing is intended to facilitate a wholesale deal if a contract can't be assigned; it's a Plan B and a valuable one at that.
  • How do you read an Alta policy?
    • What's the ALTA Settlement Statement? A Breakdown for Buyers
      1. Typically, the first number you see will be in the debit column, and that is the sale price of your property.
      2. Next will be a credit in the form of your earnest money you agreed to put down in the contract.
      3. Prorations are next.
      4. Loan/Lender fees will be next.
  • Is a settlement statement the same as a closing statement?
    • The closing statement, also called a closing disclosure or settlement statement, is essentially a comprehensive list of every expense that either the buyer and seller must pay to complete the purchase of a home (or whatever the property is).
  • Is an alta statement a closing statement?
    • Where closing disclosure is exclusively used by the buyer (or borrower for transactions that involve a mortgage), an ALTA settlement state is given to both the agents, brokers and consumers on both sides of the transaction. It's almost like a receipt that both parties acknowledge during the real estate closing process.

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