double closing or simultaneous closing

[frantz]

Can anyone explain the process to me. I am trying to wholesale REO's but i have no money and bad credit. I know it's possible using a one day dough or bridge loan as you call it. Is there money coming out of my pocket to close with the bank first and then with my end buyer. How does the process work. Please explain to me anyone,because i can find the deals,but i'm just not sure how the double closing process works.Thank you

[CharlottePlayer]

You have to find a buyer for the property before you lock it up.  The only obstacle for the MLS listings is you need $500 earnest money to make offers, so if you don't have any money you might need to start off in another niche to get your money up first.

[tampasteph]

Frantz,

Check your private messages.

Steph

[propace102]

steph willu  tell me 2..:

[ericmedem]

Basically a double closing is no different that any other type of closing except for the timeline.

A traditional closing sequence goes like this:

You buy a home live in it for 2 years then sell it to a buyer....At closing that buyer brings money to buy your home and you close.

With a double closing you close on the home...BUT instead of leaving the closing office you close on it again 10 minutes later with your buyer....

Your buyers money is then used to payoff the original closing amount and you leave with the diffence.

Closing 1 You and the seller

You buy a home for 60k

Closing 2 you and your buyer.

In this closing you have the deed signed over to you from the first closing now your selling the home to your end buyer....

He is buying for 80k so he or his Mtg company will bring a check for 80k.

Now you take that 80k check and payoff the first 60k from closing 1  and your left with the difference less the fees....

The main differences are that the deed changes hands without money given until the second closing.

Good luck

[herbster]

OK but how does title seasoning come in to play. With FHA you have to take ownership in your name, no entity and wait 90 days. Other lenders 6-12 months. Transaction funding requires you to get POF in an entity. Only the small banks I'm told don't have seasoning issues. So is really doable? Herbster

[tampasteph]

Yes, it's very doable.

Sell to cash or hard money buyers so there are no issues with seasoning.

Steph

[propace102]

so what is a loan and what is cash? is hard $,Flash funding cash i case i want to sell to a oo how do i write it with a finance cont

[tampasteph]

If you want to use a financing contingency, then you just put in your contract that the offer is contingent upon you obtaining financing.  Then submit the offer with a letter from your hard money lender.

Steph

[Jeff Corpuz]

OK but how does title seasoning come in to play. With FHA you have to take ownership in your name, no entity and wait 90 days. Other lenders 6-12 months. Transaction funding requires you to get POF in an entity. Only the small banks I'm told don't have seasoning issues. So is really doable? Herbster

It's very doable. This might surprise you but a lot of the lenders
have seasoning requirements and A LOT of them don't.

There are a ton of financing programs out there that don't require
seasoning, and a good way to go about it is by locating a few
pro mortgage brokers to be on your team.

When selling your properties, you want to make sure you have a
few good mortgage brokers on your team that have access to the
lenders that don't have seasoning requirements....

[frantz]

Thank you Eric. I know how to get around the 500 dollars escrow with the realtors,but what i want to make sure of,i don't spend a dime until i've received payment from that end buyer/investor. If my feels come after or during my closing with the end buyer,than i'm fine with that. What would one typically pay for closing on a deal like that. I buy at 60k,flip at 80k. Thank you....

[herbster]

As Jeff said, get some mortgage brokers on your team. They estimate closings all the time. I have 4. Herbster

[911loan]

FHA requires that any sale of properties that will be financed using FHA insured mortgages must:
1. Any resale of a property moy not occur 90 or fewer days from the last sae to be elibable for FHA financing and
for sales between 91-180 where the new sales price exceeds the previous sale price by 100% or more require additional documents validating the properties value.
To be eligible for FHA financing the property must be purchased from the owner of record and may not involve assignment of sales contract.
2. Sales occuring between 90-180 days following acquisition by the seler the lender is required to obtain a scond appriasal made by another appriaser if the resale price is 100% or more over the price paid by the seer when the property was acquired.
3. Resales between 91 days and 12 months, If the resale date is more than 90 days and byt before the end of 12 month following the date of acquisition by the seller but before the end of 12 month foling dte of acqusisition. FHA reserves the right to required additional documentation from the lender to support the resale value if the resale price is 5% or greater than the lowerst sales price of the property during the proceeding 12 months.  At FHAs discression such documentation may included another appriaser.

[rockfordlandlord]

Bottom line is that it will have to be a cash buyer and there is going to have to be a lot of equity to attract that buyer. With that said equity changes from Monday through Friday. The real trick is finding a buyer. The savvy buyers on here are watching the same properties you are. More than likely your buyer is not going to be another flipper but a landlord that whats to hold and rent the property. Lots of people willing to lend on these deals and get their $. If you have the relationship, local banks will do it to. But how many posts from buyers looking for deals? Easy to buy hard to sell. Sooner or later somebody in the chain has to get a mortgage and it will have to pass an inspection, apprasil and FHA/Conventional lending. Not saying it cannot happen but plan on time, work and little luck. Most investors I bid against in TX, IL, and FL have big cash and look for long term, redevelopment opportunities and more now than ever - location, location, location.