Wholesaling - Fund First Transaction Dry

[Matthew Johnson]

All,

I just spoke with two (2) real estate attorneys about having the first transaction be dry in the double close (meaning the 2nd transaction funds the first). Both attorneys indicated this is a violation of banking regulations. One attorney dealt with over 500 real estate transactions this past year (2018) and their practice just went through an audit where they were told specifically they cannot do this.  To all of the wholesalers out there, does this make sense?  Are you having to provide the funds for the original purchase before you sell the property to someone else?  Thanks, in advance, for any help here.

Thanks