Double-Closing Technicalities (i.e. my atty says my way is illegal!)

[Karin Crompton]

Hey all,

I'm having a bit of trouble sorting out how to complete a double closing here in CT. To attempt to summarize, my attorney tells me we can't fund the A-B with the B-C money. We are using a hard-money lender (HML) in this situation. I should add that the contract cannot be assigned, so the A-B does need to take place and can't be A-C.

I believe my attorney's primary issue is that we can't do B to C funding as a first step b/c we don't actually own anything at that point. Also, that that money can't be used for the A to B transaction b/c our lender has not agreed to loan to the wholesaler, only to loan to us.

We've done this a couple of times in the past in cash transactions where we brought the cash. It was clunky. Our attorney drafted a note saying we were making an unsecured loan to the wholesaler; we did A to B that way, and then the funds were immediately paid back when we did the B to C closing 10 minutes later.

This time we've got the hard-money lender. I haven't yet contacted them, but I imagine they've been in this situation before and am hopeful they will have an easy solution (probably at a price). After all, we have an agreement w/the wholesaler and the HML has agreed to fund us. All we need to do is smooth over the first part - the wholesaler buying from the seller - that has my attorney hung up.

I understand the laws vary by state, but is there something I'm missing? I swear I've heard other investors in CT talk about doing double closings all the time, though I've never gotten the nitty-gritty details. Maybe it's always this clunky.

Any suggestions?