for closing costs, so your profit will be exactly what is written in the contracts. One possible downside is that you’re relying on the buyer and seller to address any problems along the way and to officially close on the deal. You get paid at or after closing, so it can be stressful waiting for that to happen, especially since sometimes deals do fall through, and you have no legal recourse if that happens. However, if you know your buyers, your risk can be significantly mitigated. Another wholesaling option is a double closing (a.k.a. simultaneous closing or back-to-back closing ). This process involves two contracts generally signed on the same day, sometimes with a mere 20 minutes between the closings. The first is the seller selling to you (the A-to-B transaction), in which your or your company’s name is put on the title. The second contract involves you selling to the buyer (the B-to-C transaction); the second transaction typically pays for the first, which means you don’t have to put any of your own money into purchasing the property. Because the attorney already has the money for the B-to-C transaction, it’s clear that the A-to-B transaction will happen, so the B-to-C typically takes place first. (Note: A-B-C transactions may not be allowed in your area. If not, contact a transactional funder to close escrow. Your A-B and B-C contracts must be signed and submitted to them. Read all the requirements. Your local REIA/real estate investors association can also refer one. Or, ask other wholesalers who they use.) In double closings, neither party will know your profit, so this is the best option if you’d rather keep that private. However, there’s a downside — you’ll have to pay closing costs both when you buy it and sell it, so your total profit might be lower.
There are a few important points to keep in mind with both types
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