Double closings in Texas?

[Jason Grote]

After reading a blog post here on BP about double closings, I was inspired to attempt a double closing on a wholesale deal. My title company informed me that here in Texas the amount of the B to C closing will be revealed to the seller UNLESS you purchase a second title policy for the B to C closing. Can anyone confirm this?

[Austin Smither Langley]

@Wayne Dorsa thank you for bringing this thread back to life.  It's disappointing to see people who are not lawyers saying double closings and wholesaling are illegal.  Of course, always consult an attorney for legal advice.

Double closings are legal in Texas and many other states and they happen every day.  I'm not sure about every state in the US.

The key is in disclosing information and being honest.  Many people may act like buyers or sellers without admitting they are wholesaling, which can be illegal and in my view is unethical.

Both assignments and double closes can have the following pros and cons from the wholesalers perspective:

• With assignments, you have less control over the situation and must rely on the buyer to close (because you aren't closing).
• With a double close, the wholesaler manages both the relationship with the seller (A-B transaction) and the seller (B-C transaction) so that the RE investor (C) doesn't have to deal with negotiating with the original seller, who may be in a distressed situation.  This can make life easier for your buyer (C).
• With double closes, the B-C buyer usually gets hit with an extra closing cost.  Make sure your buyer is aware they will be hit with the extra closing cost.  You'll need to find better deals and take the extra closing cost into account when pricing the property for RE investors.
• Not all title companies are familiar with the double close method so you want to make sure to find one that does if you are double closing.

If done right, both methods are legal in Texas.  There are many people here on BiggerPockets that have tried saying that wholesaling is illegal and I always ask them to point to the law that makes it illegal but still haven't received any responses.