Your understanding is generally correct, but it's important to distinguish between assignment (where the wholesaler doesn't own the property) and double closing (where the wholesaler temporarily takes ownership of the property). In either case, the wholesaler usually doesn't need to provide their own funds to complete the deal unless they are doing a double closing and need private financing for that purpose.
The title company plays a key role in ensuring that the funds are processed correctly and that the transaction is legally and financially finalized, including disbursing funds to the seller and paying any fees owed to the wholesaler, private lender, or other parties involved.
- Contract with Seller: The wholesaler secures a property under contract, usually with a small earnest money deposit.
- Find Buyer: The wholesaler finds a buyer (investor) and assigns the contract, earning an assignment fee (difference in price).
- Closing: The buyer wires funds, the wholesaler receives the assignment fee, and the title company handles the transaction.
Costs:
- Earnest Money: Small deposit.
- Marketing: Costs to find deals.
- Funding (if needed): For double closings.
- Profit: The wholesaler earns the assignment fee.
prioritize transparency and value. In new markets, network, use a trusted title company, and consult an attorney for legal guidance.
