What double closing a wholesale deal actually costs start to finish

Question

The choice between assignment and double close comes down to what each actually costs in real dollars. An assignment typically costs very little, mostly an assignment fee disclosed to the end buyer and minimal paperwork. A double close involves two separate closings and, in many cases, funding from a transactional lender to bridge the gap between them. On an actual house, the added cost of a double close usually runs from a few thousand dollars up toward the higher end depending on transactional funding fees, both sets of closing costs, and title or escrow charges duplicated across two transactions. It scales somewhat with purchase price but is not purely proportional, since many of the fixed closing costs stay flat regardless of deal size. On software and services, the useful distinction is between tools that solve a real operational problem, like a skip tracing or comp tool, and subscriptions sold mainly through marketing. The line items worth budgeting for are transactional funding cost, title or escrow fees on both closings, and any earnest money at risk.

Rena Guide · Answer

Take a house you buy at 150k and resell at 168k, so an 18k spread.

Transactional funding is usually priced as points on the first closing amount, often somewhere around 1 to 2 points with a minimum dollar floor, so on 150k think in the low thousands. Rates and floors move, so get a current fee sheet in writing from the funder rather than trusting a number from a forum.

Then two sets of closing costs. Title search, settlement or attorney fee, recording, and an owner's policy on each leg. Combined that's commonly one to three thousand, but it swings hard by state because some states use attorneys and some use title companies, and transfer taxes range from near zero to several thousand on a house that price.

So on that 18k spread, four to seven thousand of cost is a normal range. It's partly flat and partly scaled: settlement and recording fees barely move with price, funding points and transfer taxes move a lot.

On software, most of what gets sold to beginners is lead generation. A CRM, skip tracing, a dialer, a list source. Those are the same tools you'd need for any wholesaling, and the double close doesn't add software. What it adds is relationships: a title company or closing attorney who'll actually do two legs in one day, and a transactional funder. Both of those are phone calls, not subscriptions.

The cost people forget is the deal that dies after you've paid for the title search on the first leg. That money doesn't come back.

dpatel_re · Answer

Add earnest money to your list. On a double close you are typically the buyer on the A contract with real earnest money at risk, and if your C buyer walks you are choosing between losing the deposit and closing on a house you did not want. That is the line item that turns a 4k cost into a 15k one.

gregpowell66 · Answer

One thing worth adding on the cost side is the second title search. On the buyer-side leg of a double close, the buyer's title company searches again and sometimes finds something the first search missed, usually a mechanics lien or an old judgment. That has held up closings on renovation deals for weeks. If it happens while holding with transactional money at a daily rate, the clock keeps running against the deal.

aaron_fitz10 · Answer

Windlass, the useful reframe is that the cost is fairly flat in dollars but not as a percentage. Four to seven thousand on an 18k spread is brutal. The same four to seven thousand on a 60k spread on a commercial-ish deal is noise. So it isn't really a beginner strategy in the sense that the people who can absorb the cost are the ones doing bigger deals.

jessreyes12 · Answer

Dumb question I'd have been too embarrassed to ask in person: if I'm the buyer on the A leg and the seller asks how I'm paying, do I say transactional funding or do I say cash? I genuinely don't know what to call it when the money exists for four hours.

ryanmck27 · Answer

Compass, on the licensing side of things that's the question I'd be most careful with. Misrepresenting how you're funding a purchase to a seller is a different problem from the wholesaling licensing question and it's the kind of thing that turns into a complaint. Say what's true, which is that you're funding with a short term lender, and put the proof of funds letter in front of them. I'm working through my own state's rules and every disclosure question I've raised has had a state specific answer, so ask an attorney where you are rather than taking mine.

What double closing a wholesale deal actually costs start to finish

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