All Forum Posts by: Duane Ortega

@Account Closed

HUDs and REOs are usually not assignable and you would need to double close. I know many investors who wholesale HUD homes via double close around the country because there are no resale restrictions. There is a HUD video case study that may be able to help you. PM me if interested.

@Bill Gulley

4. "double closings" are no longer allowed under ALTA, it's an issue with escrow and good funds availability to close.

Can you clarify what you mean by your statement above?  Do you mean it's not allowed when C's funds are used to close AB and AB doesn't have it's own funds?

It may be just semantics, but double closings are allowed as long as AB and BC closings are using separate funds to close respectively which is considered good funds.

@Ken Reed

Another way to research companies and rates is to google "transactional funding"

@Account Closed

I have dealt with multiple title companies in that area that can double close.  PM me for more info.

@Doran Summers and @David Luetkemeyer

In a double close, where a B investor is buying from A seller and selling to C buyer, transactional funding will not work if the C end buyer doesn't have enough cash since funder only funds the first transaction (AB) and has nothing to do with the 2nd transaction (BC) except for being paid off.

However, this is not a double close so transactional funding doesn't apply.

If possible with his lender, I think your plan of lending him the money will work for you especially in the market you are in since you are still making money with the worst case scenario.

@Kenney Vangalder

If you can't assign it and have to double close, you have to ensure the C buyer has a lender that won't balk at the fact that you are immediately reselling what you just owned a minute ago.  Some lenders require seasoning.  C lender also needs to wire on the day of closing and not after the deed has been recorded and filed at some point later.  Closing agent must require them (on transactional lender's behalf) to have the their funds wired first thing in the morning as these lenders require C's funds to be in escrow before they wire.  This request from the closing agent should be no biggie since BC closing is closing that day and requiring C lender to wire first thing is not an unreasonable request unless they have resale restrictions or are conservative.  Additionally, closing agents are fiduciaries and should be trusted parties, or they won't be in business for long or be sued if they don't follow lenders' closing instructions which inherently mitigates the risks for lenders to wire with instructions.

For these reasons and others, most double closings occur with C having cash or having hard money.

@Aaron Fox

If double closing, HUDs and REOs are the way to go. I know quite a few wholesalers who have double-closed and are double-closing successfully on HUD homes nationwide. You do need an end-buyer to wholesale these via double closing which implies you need a robust buyers list. I know of a case study video on double closing on HUD homes that may be able to provide you more info. PM me for it.

@Dustin Verley

@Dustin VerleyIf you are asking if you can use C buyer's (buyer from you) funds to close on the AB closing (first transaction) and then close on the 2nd transaction (BC closing), then no.  This WAS the practice about almost a decade ago, but then national title companies such as first american mandated that AB closings have to have their own funds with which to close as does BC closing back in 2010-2011.  Otherwise, title companies will not insure the transaction.  I know however, that there are still title companies out there who have long term personal relationships with B investors that still allow this, but they are few and far between.

Given that you are inquiring about "safe" practices, I don't think you would risk your transaction for a small transaction fee which you can easily account for in your asking price from the C investor or negotiate down the A seller to account for the fees or both.

Did I answer your question(s)?

@Dustin Verley

@Dustin VerleyDouble closing requires transactional funding where the funder provides you with the money to close on the 1st transaction (AB closing).  So yes, either you present a check or the funder wires the money on your behalf to the closing agent in order for you to actually buy the property.  Subsequently, you would close on the 2nd transaction (BC closing) on the same day, and everyone would receive all their profits from the BC closing.  Let me know if you have anymore questions re double closing.

@Account ClosedI know quite a few wholesalers who have double-closed and are double-closing successfully on HUD homes nationwide. Not sure about Michigan specifically, but yes, you do need an end-buyer to wholesale these via double closing which implies you need a robust buyers list. I know of a case study video on HUD homes that may be able to help you. PM me for it.