How Double Closing Works in Texas: A Guide for Wholesalers
Double closings are one of the most powerful tools in a Texas real estate wholesaler's toolkit - allowing you to buy and sell a property on the same day without ever needing to assign your contract or reveal your profit margin to either side of the deal. But they require the right title company, the right funding, and a clear understanding of how the mechanics work. This guide walks you through everything you need to know about double closings in Texas.
What Is a Double Closing?
A double closing - also called a simultaneous close or back-to-back closing - involves two separate, legally independent transactions on the same property occurring on the same day. In the first transaction (A-B), you as the wholesaler purchase the property from the original seller. In the second transaction (B-C), you immediately sell the property to your end buyer. Each transaction has its own set of documents, title insurance policy, and closing statement. Your profit is the difference between what you pay in A-B and what you receive in B-C - and it stays private.
Why Double Closing Instead of Assignment?
Contract assignment is simpler, but it exposes your assignment fee to both the seller and the buyer. In competitive markets, or when dealing with motivated sellers who might object to seeing your profit, a double close keeps your margins private. It also allows you to close deals that banks or lenders might not allow to be assigned, and is the preferred structure for many institutional end buyers and hedge fund purchasers who require clean title rather than an assigned contract.
Transactional Funding: How the A-B Side Gets Funded
The most common question about double closings is: where does the money come from for the A-B purchase? The answer is transactional funding - a short-term, same-day loan from a hard money or transactional lender that funds your purchase of the property. The lender's funds are repaid the same day from your B-C closing proceeds. Transactional funding typically costs 1-2% of the A-B purchase price for same-day use. Your title company coordinates the timing between both closings to ensure funds flow correctly.
Choosing the Right Texas Title Company for Double Closings
Not all title companies in Texas will handle double closings. Some are unfamiliar with the transaction structure, and others have internal policies against them. Cottonwood Title & Escrow specializes in double closings for Texas wholesalers and investors. We coordinate both the A-B and B-C closings, work with your transactional lender, and ensure each side closes cleanly, on time, and with full discretion regarding your assignment fee.