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  Shadowing is the process whereby an attorney looks at his client’s closing documents. This attorney is not the same attorney doing the actual closing, rather it’s one of the “opposing parties,” the seller or the end buyer. The most important documents are the deed, title policy, and closing statements. Closing agents/attorneys make a commission from the issuance of the title policy, and it can be 70% to 80+% of the actual title policy cost on the closing statement. This is usually more than the “Settlement Fees” the closing agent charges. This source of revenue is why closing [...]

  The short answer is “no” to both having to go to the A-B and B-C closings. • The usual reason is the inconvenience of having to make a trip to the closing agent especially if you are wholesaling virtually. • The more important reason is that if you sit at the closing table with your seller and your end buyer, you run a substantial risk of either of them trying to get more money (seller) or less profit (the end buyer) from you. • The closing agent will handle any objections about the seller or end buyer [...]

Buyer and seller coming to closing   If your seller wants to close even a couple of days before your end buyer, there can be a massive problem.   The transactional funder runs the risk of funding 100% of the A-B closing and the end buyer (B-C) not closing.   The usual result is a foreclosure action for the transactional lender to recover as much of his money as possible.   Therefore, one of the top priorities of double closings is that they close on the same day with the same closing agent.   No matter how “strong” [...]

Keeping Wholesaling Profits Concealed   If you double close, the seller and end buyer should not know what profit you made, well maybe. I say “maybe” because you need to understand the working of a double closing so you can “head off” any issues you may encounter. Ideally, what happens in a double closing is the same closing agent will close the A-B and B-C legs in separate rooms or at different times on the same day. Then the closing agent will record the required closing documents in the sequence of the first set (A-B) and the second [...]

There are two ways to overcome a No Assignment Clause.   The first assumption to this question is that the language in the Purchase and Sale Contract specifically states there is a “No Assignment” clause. I mention this because most Realtor contracts have three options – May Not Assign, May Assign, or May Assign with Liability. If this is the case, and the contract doesn’t specifically require one of the options to be chosen, by not checking any option you have an assignable contract. This may sound incredible, but it’s true, and we have used it for [...]

This is a very common question, and the answer is both “Yes” and “No”.   The assumption we will work on is that the investor is asking this question regarding funding his purchase and sale. I mention this because that’s different from the actual expenses and costs an investor will have to prospect for and find motivated sellers. The first obstacle is the Earnest Money Deposit (EMD) which is too often a career killer for many wannabe investors. Solving this initial obstacle will save you a lot of time and heartache later. You can do this by [...]

A transactional fee means different things to different transactional lenders.   The fees that transactional lenders charge are usually, but are not limited to the following: 1. A funding fee that is a percentage of the actual amount a transactional lender funds for the A-B closing, i.e., $100,000 at 1% = $1,000. 2. A wire fee to cover the expense the transactional lender pays for his wire to the closing agent varies greatly depending on the bank the lender is using. NOTE – you should always check to see what minimum fee the transactional lender charges because [...]

I love this question because it should be an obvious answer but it’s not!   Ironically, most hard money lenders don’t loan funds for same-day double closings. This may sound silly but it’s a fact because they consider same-day transactional funding very risky. What may be surprising is they are correct. Despite what the public thinks about the “safety” of transactional funding, it is fraught with potential issues that only result in one end – the complete loss of the transactional funder’s money! Without disclosing the specifics of what all can go wrong, suffice it to say [...]