Double Closing!? ERRRR!

[Neil J.]

Hello Bigger Pockets Family,

I am currently involved in probably one of the biggest wholesale deals I've seen outside of those "Guru" videos scattered all over YouTube. 

I've gotten a property under contract for $45k with an ARV of about $300k. Yes! don't ask me how I negotiated this deal because I can't believe it myself lol I had the property advertised for $78k and end buyers FLOCKED! even asking me out for dinner to build a business relationship for future deals. They have no idea I have the property under contract for an extremely low $45k which can net me a profit of $33k. Obviously an assignment of contract would be very dangerous for all parties because my golden deal would most likely crumble once everyone realizes what I may potentially bring home.

Solution! double closing!  so I contacted a transactional lender and tried to set everything up. I forward a standard contract to my end buyer ( B to C ) to setup the closing date, his response was "how are you selling me a property you don't own? You must assign your original contract to me". I explained to him that I will purchase then close with him in a double close, he understood the term, but he couldn't wrap his head around signing my contract because I did not own the property. Plus, I also believe he wanted to know what my profit margin would be. I am extremely frustrated! and $33k is at stake.   :(.. 

[Mike Cumbie]

Hi @Neil J.

Not trying to be critical and I fully believe your business is yours to run as you see fit. That being said, if I had a client with a 300K ARV home, 80K in repairs... (even 160K in repairs)... I would have some real discussions with them. Long before I let them sell it for 45K.... 70K or 120K.

Based on your numbers there is (300K-78K) which is $222,000 of money that is being played with over a profit of $33,000. That homeowner had zero friends on any side of this equation and that is what causes regulations.... and I can see why.

Best of luck to you in your business.