Real estate wholesaling has long been a strategy for investors to earn profits without needing significant capital or holding property long term. Traditionally, assignment contracts were the go-to method for closing deals. However, a growing number of wholesalers are shifting toward double closings—also known as simultaneous or back-to-back closings—as a way to complete transactions. This shift is driven by changing market dynamics, legal pressures, and a desire to preserve deal integrity.
Understanding the Double Close
In a double close, a wholesaler conducts two separate transactions on the same day (or within a short window). First, the wholesaler purchases the property from the seller. Then, the wholesaler sells that same property to the end buyer, often for a higher price, thereby earning a profit. Unlike an assignment, where the wholesaler transfers their contract to the buyer for a fee, the double close involves actual ownership of the property, even if only for a few minutes.
Key Reasons for the Shift
1. Protecting Profit Margins
One of the main drivers behind the move to double closings is the need to protect profits. In assignment deals, the buyer sees the wholesale fee on the contract. If the markup is significant—say $30,000 or more—it can cause friction or even prompt the buyer to walk away. With a double close, the buyer never sees what the wholesaler paid for the property, which keeps the profit private and often leads to smoother transactions.
2. Legal and Regulatory Pressure
Some states and local jurisdictions are tightening rules around assignment contracts. For instance, several markets now require wholesalers to be licensed real estate agents or disclose their assignment fees to sellers and buyers. In response, many wholesalers are choosing double closes to avoid regulatory scrutiny. By completing two distinct transactions, they are engaging in a more traditional real estate process that is less likely to raise legal red flags.
3. Building Credibility with Sellers and Buyers
Sellers are increasingly wary of assignments, especially if they’ve been burned in the past by deals falling through. A double close gives the seller more confidence because they are selling to someone who will actually take title to the property. On the buyer side, especially with experienced investors, double closings create a cleaner transfer with fewer questions about the chain of title or control over the property.
4. Access to Transactional Funding
Transactional funding—short-term, same-day loans used to facilitate double closes—has become more widely available and competitive. These loans are specifically designed for wholesalers to buy and resell property quickly. As access to this funding has grown, double closing has become a more viable strategy, even for newer wholesalers with limited capital.
5. Dealing with Title Company Requirements
More title companies are now scrutinizing assignment contracts and, in some cases, refusing to process them. This is especially true in states with stricter real estate laws or where wholesalers have developed a poor reputation. Double closing circumvents this issue by sticking to standard sale processes and minimizing complications during escrow.
Is the Double Close Right for Everyone?
While double closes offer many advantages, they are not without challenges. They involve additional closing costs, require access to short-term funding, and necessitate excellent coordination. Wholesalers need to have a reliable title company and a solid relationship with transactional lenders to make these deals work seamlessly.
Still, for many professionals in the field, the benefits outweigh the drawbacks. As markets become more competitive and transparency becomes more important, double closing is emerging as a preferred method that allows wholesalers to scale their business, stay compliant, and protect their margins.
Final Thoughts
The real estate wholesaling landscape is evolving. With more eyes on wholesaler practices and a greater need for discretion and professionalism, double closes provide a flexible, legal, and efficient way to do business. For wholesalers looking to future-proof their strategy and maintain profitability, mastering the double close is quickly becoming essential.