Double Close Confusion

[Brad T.]

Hi Everyone, 

New to BP & Wholesaling and hoping someone can help me understand the double close strategy a little better. I get the general concept.. but struggling to understand all the fees. 

So from what I gathered, you will end up paying two sets of closing costs (A to B, and then B to C).

Questions-

As wholesalers, we also cover the seller's closing cost to make the offer more appealing. So.. are you paying 3 sets of closing costs to get the deal done?

In Pennsylvania, typical closing costs can be anywhere from 5%-6% of the sale price. So would I need to factor in 12%-18% of the sale price into the deal to cover 2 to 3 sets of closing costs? Or am I way off base?

Sorry if this is a dumb question.. Still learning. I just can't wrap my head around the fees.

Thanks in advance.

[Account Closed]

Quote from @Brad T.:

Hi Everyone, 

New to BP & Wholesaling and hoping someone can help me understand the double close strategy a little better. I get the general concept.. but struggling to understand all the fees. 

So from what I gathered, you will end up paying two sets of closing costs (A to B, and then B to C).

Questions-

As wholesalers, we also cover the seller's closing cost to make the offer more appealing. So.. are you paying 3 sets of closing costs to get the deal done?

In Pennsylvania, typical closing costs can be anywhere from 5%-6% of the sale price. So would I need to factor in 12%-18% of the sale price into the deal to cover 2 to 3 sets of closing costs? Or am I way off base?

Sorry if this is a dumb question.. Still learning. I just can't wrap my head around the fees.

Thanks in advance.

That's not a dumb question. The idea of real estate investing is to be profitable and you need to know your costs.

If you are covering the seller's closing costs, that is one set of fees.
When you buy the property in the first closing, you are also paying your fees as well. That's fees number 2.

If you use a Hard Money Lender to transact, you will have their fees also. That is added to your fee list.

When you sell, you will have fees, your own, that you pay.
So, you are paying 3 closing costs and your hard money loan costs if you're using hard money. Plus you pay any transfer fees the state charges. Make sure you talk to an escrow agent to get more detailed information.