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Double Close vs Assignment Fee
I know some people will do an assignment fee and some will do a double close. What are your experiences with both? Appreciate the insight!
#4 Wholesaling Contributor
- Wholesaler
- Austin TX
I've done both. It depends on the situation. When my wholesale fee is over a certain amount ($20K-$25K) I tend to double close to keep from ruffling any feathers on the buyers side. The cons of this are that you will have to fund the A-B side of the transaction. And cover the closing costs. So you need to be getting a higher fee in order to offset the cost. With an assignment, its much simpler and there are no costs for the wholesaler. If you are in a state like Illinois, you will have to double close if you arent a licensed real estate agent.
Hey @Henry Dominguez - Good question! @Lydia R. gave some pretty good context above. Double closing allows you to be more discrete, but I have found it to be a bit trickier because of the funding issue Lydia mentioned.
I think you should figure out what the rules and regulations are in your specific state because that will make a difference. Here in Chicago (Illinois) you can only wholesale (market for sale) one property per year without having your real estate license.
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Contractor IL (#TGC116360)
- Quality Builders
- http://qualitybuilders.com
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Quote from @Lydia R.:
I've done both. It depends on the situation. When my wholesale fee is over a certain amount ($20K-$25K) I tend to double close to keep from ruffling any feathers on the buyers side. The cons of this are that you will have to fund the A-B side of the transaction. And cover the closing costs. So you need to be getting a higher fee in order to offset the cost. With an assignment, its much simpler and there are no costs for the wholesaler. If you are in a state like Illinois, you will have to double close if you arent a licensed real estate agent.
Is it legal in IL to double-close and essentially wholesale without a REA license?
Quote from @Lydia R.:
I've done both. It depends on the situation. When my wholesale fee is over a certain amount ($20K-$25K) I tend to double close to keep from ruffling any feathers on the buyers side. The cons of this are that you will have to fund the A-B side of the transaction. And cover the closing costs. So you need to be getting a higher fee in order to offset the cost. With an assignment, its much simpler and there are no costs for the wholesaler. If you are in a state like Illinois, you will have to double close if you arent a licensed real estate agent.
Are there any circumstances under which you would find it advantageous to double-close when you had a cash buyer willing to buy assignment from you? Of course with the exception of States where it is illegal to assign a contract without REA license, like in IL.
We double close if our fee is more than 20% of the purchase price because most hard money lenders will flag it if they see more than a 20% fee on the hud.
Quote from @Lydia R.:
I've done both. It depends on the situation. When my wholesale fee is over a certain amount ($20K-$25K) I tend to double close to keep from ruffling any feathers on the buyers side. The cons of this are that you will have to fund the A-B side of the transaction. And cover the closing costs. So you need to be getting a higher fee in order to offset the cost. With an assignment, its much simpler and there are no costs for the wholesaler. If you are in a state like Illinois, you will have to double close if you arent a licensed real estate agent.
Hi Lydia - I fund double closings nationwide. Reach out if you’d be interested in learning more about how we may be able to work together.