Why you should be happy your wholesaler double closes their deals

Why you should be happy your wholesaler double closes their deals

Investor · Phoenix, AZ · Member since 2015 · 191 posts · 152 votes

Opinion:

I work for a major wholesaler in Houston, Texas. On day 1 of meeting any new potential client, one of the main points we go over is that we do a double close on all deals and the investor is responsible for our closing costs as well as their own. Very important to disclose. Does that make you jump for jump for joy? Probably not....sounds expensive. But you should be jumping for joy. You should bake your wholesaler some holiday cookies if they can double close. I'll take oatmeal raisin. 

If your wholesaler double closes, that means they have the ability to put their money where their mouth is. That means they can fund their own deals. That means they have negotiating power because they don't have to put that "and or assigned" next to their name. The wholesaler is saying 'hey Mr seller, our company may sell off your property to an investor but we are buying it with our own cash and taking title. 

In my opinion based on experience, this allows for better quality deals. The wholesaler is generally more reliable and sellers are more willing to work with them. Sure its more expensive for the investor. But if your wholesaler tells you on day 1 that you should expect 2 closing costs, then it is now your responsibility to account for that when calculating potential profit. If the profit margin works, then why does it matter if you pay 2 sets of closing costs? It's the cost the play the game. Could you have found a better deal elsewhere with no double close? If so, then go buy it. 

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  • Investor · Woodbridge, VA · Member since 2015 · 476 posts · 197 votes
    10y

    Yes but couldn't you just as easily put the "and or assigned" and then if you don't find a buyer you can buy it yourself and sell it off later without incurring the investor 2 sets of closing costs on every deal? You would still be on the "moral high ground" and saving your customers money at the same time. Or do you really just do this so you don't have to tell the buyer what you're doing? If that's the case and you still get good deals, then don't worry about it, but don't try to take the high ground for it either.

  • Investor · Phoenix, AZ · Member since 2015 · 191 posts · 152 votes
    10y

    At no time did I refer to the morality of our company using the double close method. I'm going to go ahead and bold the point of my post and simplify it into 4 words so that you don't miss my point again. Look for it. 

    The post was about the quality of the deal. I could name a few competitors of ours who double close and I would say they also have better quality deals than those who do assignments. 

    The jumping for joy comment and the request for baked cookies was to add some life to the post I'm sorry if you were offended. I'm just excited about Christmas. 

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