Every now and then, somebody asks me if I’m scared to be investing in real estate in such a turbulent market. When they ask this questions, they usually want to know two things. First, how am I getting all the deals financed, and second, am I scared the market will turn for the worse (valued decline) and I’ll end up with a house I can’t sell. These are very valid questions, and questions of a person who does not understand the value of (or has never heard of) the double closing (also called a simultaneous closing).

So what is a double closing? Simply put, it’s a transaction where somebody buys a property, and turns around and sells it the exact same day. There are pros and cons to this type of transaction, both of which we’ll cover in this article. But first, let me tell you that in today’s market, the pros very much outweigh the cons!

Before we go any further, let’s start by saying that this type of transaction is legal, always has been legal, and always will be legal (although I am not an attorney). There is absolutely nothing wrong with buying a house and turning right around and selling it the exact same day. It is happening countless times, in every single state, and every single day in this nation. David and I have done countless numbers of them, and our students have done, and continue to do, the same.

Ok, so what are the pros of this transaction? Well, the biggest benefit to this type of transaction, and the main reason most investors use it, is that it allows you to buy and sell a property without funding it. For those of you who have watched late night television, THIS is how you can buy and sell real estate “with no money and no credit!” Yes, this is the answer and the magic bullet for those of you who were wondering how someone can possibly buy and sell property with zero credit and no money! Well, it is done all the time, and the person buying and selling the same day is never asked about funds or credit score. It’s an awesome way to close deals!

Another huge benefit to closing this way is that you can flip properties without taking possession of the property for more than a few minutes. What this means is that you can buy and sell houses in a turbulent market, even a severely declining market, and be protected! And if you use incorporate Land Trusts in your double closings, you never even show up on title anywhere! So nobody can look to see how many properties you are flipping (if you wanted to hide it). So as you can see, there are many HUGE benefits to the double closing.

Ok then, you ask, what are the cons to doing this type of closing? Well, there can be a few challenges to this closing. The first is the timing of the whole thing. You need to get the seller and your end buyer lined up to close on the exact same day. And if you’re incorporating the double closing with a short sale, this can be very tricky and stressful. A second con to this type of closing is title seasoning. If your end buyer is using traditional financing to get the deal closed, and they have title seasoning requirements, you are going to have some hurdles to cross before being able to get it closed, and it could very well kill the deal. If you are doing a traditional double closing without Land Trusts or Options, then your end buyer may have to use a “non conforming” lender who does not require title seasoning. Land Trusts and Options (to a certain degree) help with the title seasoning, and that’s the topic of another discussion.

So as you can see, there are some challenges to the double closing, but it is a fantastic tool that you can use in your real estate business to minimize your risk with buying and selling real estate, especially in a tough market like what we have today.

The best!!!

Marty Schulting

Top Foreclosure Training

www.TopForeclosureTraining.com