Double closing is a real estate investment strategy where an investor buys and sells a property on the same day or within a short timeframe. This method allows investors to profit from the difference between the purchase and sale prices without using their own capital. A critical component of this strategy is securing appropriate funding to facilitate both transactions seamlessly. Build with JV offers specialized funding solutions tailored Funding for double closing, enabling investors to maximize their returns.

Understanding Double Closing

A double closing involves two consecutive transactions:

  1. First Transaction: The investor purchases the property from the seller.
  2. Second Transaction: The investor sells the property to an end buyer, often at a higher price.

The key to this strategy is the use of transactional funding—a short-term loan designed to cover the gap between the purchase and sale, ensuring that the investor doesn't need to use personal funds.

Funding Options for Double Closings

Securing timely and reliable funding is essential for the success of double closings. Two primary funding options are available:

  1. Transactional Funding from Private Lenders: Private money lenders offer transactional funding specifically designed for double closings. This short-term loan covers the purchase price of the property until the sale to the end buyer is completed. Benefits include quick approval processes, typically without credit or income checks, and funding durations ranging from 1 to 3 days.

  2. Utilizing Personal Cash Reserves: Some investors opt to use their own funds to finance the initial purchase. While this approach eliminates the need to secure external funding, it requires sufficient liquidity and ties up capital that could be used for other investment opportunities.

Advantages of Using Transactional Funding

Opting for transactional funding offers several advantages:

  • Preservation of Capital: Investors can engage in multiple deals without depleting personal funds.
  • Speed and Efficiency: Quick funding approvals align with the fast-paced nature of real estate transactions.
  • Confidentiality: Using transactional funding keeps the investor's profit margins confidential, as the end buyer is not privy to the purchase price paid to the seller.

Considerations When Securing Funding

When arranging funding for double closings, investors should consider the following:

  • Funding Costs: Be aware of the fees and interest rates associated with transactional funding. For instance, Build with JV's funding partners charge a flat rate of 1.25% for transactions up to $1,000,000, with a minimum return of $1,500.

  • Timing: Ensure that the funding aligns with the closing schedule. Both transactions should occur close together, often on the same day, to avoid delays and additional costs.

  • Title Company Selection: Choose a title company experienced in handling double closings. They can coordinate both transactions efficiently and ensure that all legal requirements are met.

Build with JV's Funding Solutions

Build with JV specializes in providing funding solutions tailored for real estate investors engaged in double closings. Their offerings include:

  • Double Closing Funding: Short-term loans to cover the purchase price until the sale to the end buyer is completed.
  • EMD Funding: Financial support for earnest money deposits, ensuring that investors can secure property deals without tying up personal capital.
  • Private Money Lending: Flexible financing options for various real estate projects, including fix and flips and buy and holds.

By partnering with Build with JV, investors can access the necessary capital to execute double closings effectively, streamline their investment processes, and enhance profitability.

Conclusion

Double closing is a powerful strategy for real estate investors seeking to maximize profits without utilizing personal funds. Securing appropriate funding, such as transactional loans from private lenders, is crucial to facilitate these swift transactions. Build with JV offers specialized funding solutions that cater to the unique needs of double closing, providing investors with the resources needed to succeed in the competitive real estate market.