Closing Cost when Wholesaling

[Dustin Dummer]

The most important aspect of wholesaling (or any business transaction) is making a profit. One topic I haven't seen specifically addressed is factoring closing cost on wholesale deal. Am I correct that typically the wholesaler is responsible for the closing cost for both the seller and the investor correct (unless you're able to do a simultaneous closing)? Therefore I imagine to make any money, all closing cost have to be included in your assignment fee when determining your maximum purchase price? What are realistic changes of being able to do a simultaneous closing? What are typical cost for a back to back closings? I know my closing cost for my personal home was over $2500. Thanks in advance for any answers.

[Pratik P.]

@Dustin Dummer I think you may be confusing things a bit here. 

You can close a wholesale deal in 2 main ways. 

1. Assignment of contract: In this method, your end buyer will simply fill your shoes and take over the purchase of the property. They will be paying closing costs. If your contract with the seller says that the buyer will pay ALL closing costs, then your buyer will pay both seller and buyer closing costs. You don't pay any closing costs in this. 

2. Double-close/Simultaneous closing: This is where you'll fully close on the property with your name and own it for a short amount of time. You'll be responsible for whatever closing costs you agree to with both parties. So if you told your seller that you'll pay all closing costs, that will come out of your check. You'll also have to cover your side of closing costs when you sell to your buyer unless they agreed to cover all the costs. 

I would expect about 2% of final sale price in closing costs.