What Is Double Close?
A double close keeps the wholesaler's profit private. In an assignment of contract, the end buyer sees the original purchase price and the assignment fee — full transparency. In a double close, two separate HUD-1 or closing disclosures are generated. The seller sees the A-to-B price. The end buyer sees the B-to-C price. Neither party knows the other's numbers. The wholesaler appears as the actual buyer on the first transaction and the actual seller on the second. This requires either transactional funding (a short-term loan for hours or days), the end buyer's funds (in "dry" closing states), or the wholesaler's own cash. The cost is higher than a simple assignment — double closing costs, transactional funding fees, and title/escrow charges on two transactions. Wholesalers use double closes when the profit margin is large enough to draw objections in an assignment, when the seller's contract prohibits assignment, or when the end buyer's lender won't fund on an assigned contract.
A double close is a wholesaling strategy where two separate real estate transactions close in sequence — the wholesaler buys from the original seller (A-to-B) and then immediately resells to the end buyer (B-to-C) — with the wholesaler briefly holding title between closings.
At a Glance
- Structure: Two separate closings — A-to-B (wholesaler buys) then B-to-C (wholesaler sells)
- Title Ownership: Wholesaler briefly holds title, typically for minutes to a few days
- Funding: Transactional funding, wholesaler's cash, or end buyer's funds (varies by state)
- Cost: Double closing costs plus transactional funding fees (1-2% of the A-to-B purchase price)
- Timing: Same day in most states; some require 24-72 hours between closings
- Privacy: Neither the original seller nor the end buyer sees the other party's transaction price
How It Works
A double close involves two distinct real estate transactions that happen in rapid succession, often on the same day at the same title company.
Transaction 1 (A-to-B): The wholesaler (B) purchases the property from the original seller (A). A standard purchase agreement governs this transaction. The wholesaler signs closing documents, pays the purchase price, and receives the deed. Title transfers from A to B.
Transaction 2 (B-to-C): The wholesaler (B) immediately sells the property to the end buyer (C). A separate purchase agreement governs this transaction. The end buyer pays the higher purchase price, the wholesaler signs the deed transferring title from B to C, and the wholesaler keeps the difference between the two prices as profit.
The challenge is funding the A-to-B transaction. The wholesaler needs to pay the seller's purchase price before receiving the end buyer's funds. Three funding options exist:
Transactional funding is the most common solution. A transactional lender provides 100% of the A-to-B purchase price for a very short period — often just hours. The fee is typically 1-2% of the loan amount plus a flat origination charge of $500-$1,500. On a $150,000 A-to-B purchase, transactional funding costs $2,000-$4,500. The loan is repaid from the B-to-C closing proceeds the same day.
End buyer's funds can sometimes fund both transactions in states that allow "wet" closings where the title company disburses the end buyer's purchase funds to close the A-to-B side first. Not all states or title companies permit this.
Wholesaler's own cash eliminates the transactional funding cost but ties up capital. Some wholesalers maintain a $100,000-$200,000 line of credit specifically for double closes.
The title company coordinates both closings. Some title companies are experienced with double closes and handle them routinely; others refuse or create unnecessary friction. Finding an investor-friendly title company is essential. The wholesaler needs two title commitments, two sets of closing documents, and two policies — though the cost of the A-to-B title policy is sometimes waived since ownership is momentary.
Real-World Example
Kevin Bautista, a wholesaler in Tampa, Florida, put a 3-bedroom house in Seminole Heights under contract for $165,000. The seller was an out-of-state heir who inherited the property and wanted a clean sale without repairs or showings. Kevin's contract with the seller was a standard purchase agreement with a 30-day closing window.
Kevin marketed the property to his buyer's list and found a fix-and-flip investor, Angela, who agreed to purchase at $215,000. The property needed $35,000 in renovations and had an ARV of $310,000 — solid margins for Angela.
Kevin chose a double close instead of an assignment for two reasons: his $50,000 profit would be visible on an assignment disclosure and might cause Angela to renegotiate, and the seller's contract did not include an assignment clause.
Kevin's title company, a Tampa firm experienced with investor transactions, coordinated both closings for the same morning. Kevin used a transactional lender who provided $165,000 for the A-to-B closing at a cost of $2,475 (1.5% fee). Kevin's total closing costs across both transactions:
- A-to-B closing costs: $3,200 (title, recording, prorated taxes)
- B-to-C closing costs: $4,100 (title, recording, transfer tax)
- Transactional funding fee: $2,475
- Total costs: $9,775
Kevin's gross profit: $215,000 - $165,000 = $50,000. After $9,775 in costs, his net profit was $40,225. With an assignment, his costs would have been roughly $500 (assignment fee processing), netting $49,500 — but the risk of Angela seeing the $50,000 markup and walking away or renegotiating was real. Kevin accepted the $9,275 cost difference for deal certainty and privacy.
The entire process — both closings — took 2 hours and 45 minutes at the title company's office.
Pros & Cons
- Keeps profit margins confidential from both the original seller and end buyer
- Works when purchase contracts prohibit assignment or don't include an assignment clause
- Allows wholesaling to end buyers using conventional or FHA financing (some lenders reject assigned contracts)
- Creates a clean chain of title with the wholesaler as a legitimate buyer and seller
- Avoids the stigma some sellers and agents associate with contract assignments
- Double closing costs ($5,000-$10,000) significantly reduce profit on smaller deals
- Transactional funding adds 1-2% in fees and requires pre-arranged relationships with lenders
- Two transactions mean twice the paperwork, twice the title work, and twice the potential for delays
- Not all title companies or attorneys will facilitate double closes — finding cooperative partners takes effort
- Some states impose minimum hold periods or seasoning requirements that prevent same-day closings
Watch Out
- Title Company Selection: Many title companies refuse to handle double closes or lack experience with the process. Vet your title company before you have a deal under contract. Ask specifically: "Do you facilitate same-day double closings for investors?" Get a clear yes before proceeding.
- Seasoning Requirements: Some end buyer lenders require the seller (the wholesaler, in a B-to-C transaction) to have owned the property for a minimum period — often 90 days. FHA has a 90-day anti-flipping rule that applies to the B-to-C sale. Verify the end buyer's lender's seasoning requirements before structuring a same-day double close.
- Transactional Funding Due Diligence: Transactional lenders require proof that the B-to-C buyer is confirmed and funded before they'll provide A-to-B capital. If the end buyer's financing falls through on closing day, the transactional lender won't fund, and the A-to-B closing collapses. Always have proof of the end buyer's funds or loan commitment in hand.
- Tax Implications: The wholesaler is the owner of record, even if only for minutes. This creates a taxable sale. Short-term capital gains (or ordinary income if wholesaling is your primary business) apply to the profit. Consult a CPA about whether your wholesaling activity constitutes dealer status, which prevents capital gains treatment.
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The Takeaway
A double close is the privacy-first alternative to assigning a contract. It costs more — transactional funding fees plus double closing costs can run $5,000-$10,000 — but it prevents both parties from seeing the wholesaler's margin. Use a double close when the profit is large enough that transparency would jeopardize the deal, when the contract doesn't allow assignment, or when the end buyer needs conventional financing that won't close on an assigned contract. For deals with thinner margins ($10,000-$15,000), a simple assignment is more cost-effective. Match the closing strategy to the deal size and circumstances.