In the world of real estate wholesaling, one of the most common questions wholesalers ask is: "Can you do a double close?" While the term "double close" may sound simple, it’s actually one of the most misunderstood and legally problematic tactics in real estate. Many wholesalers attempt to use double closings to maximize profits, but in practice, these transactions can lead to legal disputes, compliance issues, and even potential fraud.
Below, we’ll break down what a double close really is, why many wholesalers misunderstand the concept, and the better way to structure wholesale deals legally.
What Is a Double Close?
A double close is when a wholesaler:
- Contracts with a seller to buy a property at a lower price.
- Finds a buyer who is willing to purchase the property at a higher price.
- Closes two transactions back-to-back—one between the seller and the wholesaler (the "A-to-B" transaction), and another between the wholesaler and the new buyer (the "B-to-C" transaction).
Wholesalers expect to profit from the price difference between the two transactions. The problem is that many wholesalers misunderstand the financial and legal requirements of a proper double close.
The Problem With Double Closings Without Money
Many wholesalers incorrectly assume that they can close a deal without bringing any of their own money. When wholesalers call a title company and ask, “Can you do a double close?”, they often mean:
- Can you close the transaction without me paying the seller first?
- Can I use the end buyer’s money to fund my first transaction?
In Texas, this is not how real estate transactions work. Title companies and attorneys cannot and will not close a deal where money is not properly funded. Any attempt to close a deal without funds can lead to serious legal consequences, including breach of contract, fraud claims, and title complications.
The Better Way: Owner Financing for Wholesalers
Instead of trying to pull off a legally questionable double close, wholesalers should consider owner financing as an alternative.
Here’s why owner financing is the better way to wholesale:
- Take Legal Ownership – Instead of just assigning a contract, the wholesaler actually takes title to the property through an owner-financed agreement with the seller.
- Avoid Title Disputes – Because the wholesaler legally owns the property, there’s no risk of assignment disputes or title issues with the end buyer.
By taking these steps, wholesalers can protect themselves legally while still making a profitable transaction.
Final Thoughts: Don’t Cut Corners on Closings
While double closings can be done properly, wholesalers must bring their own funds to the table and comply with real estate laws. Trying to fund a deal without money is not a true double close—it’s a legal disaster waiting to happen.
Wholesalers who want to operate legally and profitably should work with experienced attorneys and title companies to ensure full compliance with Texas real estate laws.
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