Contract assignment or double close?

[Marc Freislinger]

Since I don't have the resources to fund every deal I come across, I've been doing some research on wholesaling/birddogging. It appears that there are two basic ways to do this.

Contract Assignment
As I understand it, this is where you simply sell your assignable purchase contract to the end buyer. They pay you a fee for the contract, and then continue on to purchase the property directly from the seller. In this case, the buyer would be responsible for taking care of all the closing arrangements.

Double Close
I'm going to include simultanious closings in this catagory. Again, from my understanding, and limited personal experience, the wholesaler gets the property purchase lined up, gets the buyer lined up, arranges the closing, takes care of all the little fires that come up, etc. The buyer basically just has to show up at the closing table with money.

So my question is to those who have actually used wholesalers. Do you prefer to purchase the contract, or to do a double close? Would you expect to pay the wholesaler more to arrange a double close than for an assignment?

[Andy J.]

As a purchaser of wholesales I prefer a contract assignment for two reasons.

Number one: with underwriting restrictions these days, when I go to resell the property I don't want to muddy the chain of title with a history of "flipping" due to a double close. May or may not be an issue, but I'd prefer to keep the chain of title clean so I don't have to find out the hard way.

Number two: if my wholesaler is double closing that means there are additional fees that are to be paid, whether they eat the additional costs or I do, it's less profitable for one or both of us. The more money that myself and my wholesaler make the more likely we are to do business again in the future.