How a Double Close Works on a Wholesale Deal

You have a seller under contract at $150,000. You have an end buyer ready to pay $172,000. The seller doesn't know your buyer exists, and you'd rather not hand either of them a contract that shows your $22,000 spread in plain print. That's the exact situation a double close solves.

A double close is two separate real estate closings on the same property, done back to back, usually within a day or two of each other. You close first as the buyer, purchasing the property from the seller under contract A. Then you close again, minutes or hours later, as the seller, selling that same property to your end buyer under contract B. Two contracts, two deeds, two closings, often at the same title company on the same day. The wholesale fee never appears as a line item because it's the difference between what you paid in transaction one and what you sold for in transaction two.

Why Wholesalers Use a Double Close Instead of an Assignment

Assigning a contract is simpler and cheaper. You sign the purchase agreement, then assign your rights in that agreement to your end buyer for an assignment fee, and only one closing happens. So why do a double close at all?

Three reasons come up over and over.

The seller doesn't want the buyer to see the markup. Some sellers, especially in probate or pre-foreclosure situations, get upset when they learn someone flipped the contract for a five-figure fee before the ink dried. A double close keeps the two transactions legally and visually separate.

The contract prohibits assignment. Bank-owned properties, some estate sales, and a lot of standard purchase agreements written by listing agents include a clause that bars assignment without the seller's written consent. You can't assign what you're not allowed to assign. A double close sidesteps the clause entirely because you're not assigning anything. You're buying, then selling.

The spread is large enough that an assignment fee would spook the buyer's lender or the title company. When your fee is a few thousand dollars, nobody blinks. When it's $40,000 or $60,000, some lenders and underwriters start asking questions an assignment can't easily answer. A double close, with two arm's length purchase prices, is a cleaner paper trail.

How the Money Actually Moves

Here's the part people search for and don't get a straight answer on: where does the money for the first closing come from if you don't have $150,000 sitting in an account?

Two options.

Same-day funding with your end buyer's money. If both closings happen on the same day at the same title company, some title companies will use the incoming funds from closing B (your end buyer's money) to fund closing A (your purchase from the seller). This is sometimes called a simultaneous close. It only works if the title company is comfortable with it, the end buyer's lender allows it, and the timing lines up so funds from the second closing arrive before the first one has to disburse.

Transactional funding. If the same-day funding won't work, you borrow the purchase price for a few hours or a few days from a transactional lender. These are short-term lenders who exist specifically for double closes. They charge a flat fee or a percentage, typically 1% to 2% of the loan amount, and they only lend when they can see you already have a buyer under contract at a higher price. You use their money to close on the seller's side, then pay them back the moment closing B funds, usually the same day.

A Worked Example

Say you have the property under contract with the seller for $150,000. Your end buyer has agreed to pay $172,000.

Closing A, you as the buyer:

• Purchase price: $150,000
• Your closing costs (title, recording, etc.): roughly $1,800
• Transactional funding fee at 1.5% of $150,000: $2,250

Closing B, you as the seller:

• Sale price: $172,000
• Your closing costs on this side: roughly $1,200
• Repayment of transactional funding: $150,000 plus the $2,250 fee

Run the numbers. You bring in $172,000 at closing B. You owe $150,000 principal back to the transactional lender, plus $2,250 in fees, plus $1,800 in closing costs on the buy side, plus $1,200 in closing costs on the sell side. That's $155,250 going out.

$172,000 minus $155,250 leaves you with $16,750.

Compare that to an assignment fee. If you'd simply assigned the contract for $22,000, you'd walk away with $22,000 minus whatever small assignment paperwork fee the title company charges, often just a few hundred dollars. The double close cost you roughly $5,250 more in transactional funding and doubled closing costs, in exchange for keeping the seller's price and the buyer's price separate.

That trade-off is the whole decision. You're paying for privacy and contract compliance, not for a better outcome.

What People Get Wrong

The biggest mistake is assuming any title company will do this. Plenty won't. Double closing makes some title companies and underwriters nervous because it can resemble the illegal practice of flipping properties with inflated appraisals to defraud a lender, even though a legitimate double close involves no fraud at all. Call ahead. Ask directly whether they handle double closings and whether they've done one in the last year, not the last decade.

The second mistake is not lining up transactional funding before you need it. You cannot call a transactional lender the morning of closing and expect same-day funds. Most want your fully executed contract with the end buyer, proof of the closing date, and a few days of lead time.

The third mistake is thinking a double close hides the transaction from everyone. It doesn't hide anything from the title company, the county recorder, or the IRS. Both sales are recorded as public deed transfers. What it hides is the seller's original price from the end buyer, and vice versa, at the closing table itself.

One Real Limitation

Double closing costs money and adds risk. You're paying closing costs twice, and if your end buyer's financing falls through between closing A and closing B, you now own a $150,000 property you have to fund, resell, or hold. With an assignment, if the end buyer backs out before closing, you're usually just out the time you spent, not the property. If your spread is small, say under $10,000, the transactional funding fee and doubled closing costs can eat a third of your profit or more. Below a certain margin, a double close stops making financial sense even when it's legally the cleaner path.

If you're running the numbers on a deal like this right now and want to see the spread, the funding cost, and your actual take-home before you commit to either structure, that's exactly what Deal Machine at readmoneydecoded.com/deal-machine is built to run for you.

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