What Is a Double Closing?
A double closing involves two separate real estate transactions that close on the same day (or within a few days of each other). The investor is at the center:
- Transaction A (A→B) — The original seller (A) sells the property to the investor (B).
- Transaction B (B→C) — The investor (B) immediately resells the property to the end buyer (C).
Each transaction has its own contract, its own deed, its own title search, and its own closing statement. The investor briefly holds title, often for just minutes or hours.
Why Investors Use Double Closings
- Profit Privacy — In an assignment of contract, both the seller and the end buyer can see the investor's profit. In a double closing, each transaction is separate. The seller does not know what the investor is selling the property for, and the buyer does not know what the investor paid.
- No Assignment Restrictions — Some contracts and lenders prohibit assignment. A double closing avoids this restriction because the investor actually takes title.
- Larger Spreads — When the investor's profit margin is very large (buying for $100,000 and selling for $200,000), a double closing is more professional and less likely to raise red flags with title companies and lenders than an assignment with a $100,000 fee.
Funding the First Transaction
The critical challenge is funding Transaction A. Common methods include:
- Transactional Funding — A specialized, short-term lender provides the purchase funds for a few hours, charging a flat fee (typically 1-2% of the purchase price).
- Using End Buyer's Funds — In some states, the end buyer's purchase funds can be used to close Transaction A. Florida title companies vary in their willingness to allow this.
- Private Money — The investor uses their own cash or borrows from a private lender.
Related Terms
- Deed — Two deeds are recorded on the same day (A→B and B→C)
- Contract — Each transaction requires its own separate purchase agreement
- Title Search — Both transactions require independent title verification
Barnes Walker Real Estate Transactions
Barnes Walker's real estate attorneys structure and close double closing transactions for Florida investors, coordinating title work, transactional funding, and simultaneous deed recordings to ensure both transactions close legally and efficiently. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC