What is actually collateralizing a same day double close funding request on a vacant lot

Ask what the lot is worth if you end up owning it, because that's the only number that protects you. Everything else is his optimism. If 88 is the real market number then a failed B to C closing leaves you whole and bored. If 88 is 88 because a builder was willing to pay 121, you've financed a spread, and the spread is what disappears when the builder walks.

The thing I like about land from where I sit is there's no scope to creep. No roof, no mold, no surprise knob and tube. Your downside is a carrying cost you can calculate on the back of an envelope, which is more than I can say for anything I've renovated.

Worth asking how he found the seller. If it came off a mail campaign to absentee owners, an 88 purchase on a 121 lot is normal and boring. If it came off the MLS at a 33k discount, something is wrong with the lot and nobody has said what yet.

Blunt version of the question worth asking here: if the deal is as good as he says, why not just buy the lot directly at 88 and sell it at 121? The underwriting is the same either way. Either the 121 is believable or it isn't.

On mechanics, ask the closer whether the second closing can actually fund off the first one's proceeds, because whether a title company will do a same day back to back at all varies by state and by underwriter, and some will only do it if the money sits in escrow for the A to B side outright. Get that answer from the closer in writing, not from the person arranging the deal.

33k of spread on an 88k basis is 37 percent. That happens on land, and it also happens that a builder's number can be a figure said on the phone before his own lender looked at the site. Ask for the builder's signed agreement, the earnest money receipt from escrow, and whether the builder is paying cash. A hard deposit is only hard if escrow is holding it.

Studying for the license exam right now and this is the part I keep tripping on. Whether what he's doing needs a license depends on the state and on whether he's marketing the property or his contract position, and I'm not qualified to tell you where that line sits in yours. Ask him directly what he's marketing and to whom.

Read the B to C agreement, not just the numbers pulled from it. Worth knowing who the named buyer is, whether the builder can assign it to an entity nobody has heard of, what the default remedy is if the seller does not perform, and whether there is a financing contingency hiding under a heading that says something else. Then read the A to B agreement for a deed restriction or a right of first refusal on the seller's side, which is the kind of thing that shows up on land and never on houses. Also worth asking what the doc fee is actually for. On a one day loan, the note and the deed of trust or mortgage matter, along with who prepares them, because in some states that recording and preparation work has to be done by a licensed attorney and the fee schedule looks nothing like it does elsewhere.