Double Close Real Estate: Unlock Financial Leverage and Leverage with Two Transactions

Double close real estate is a powerful strategy that allows investors to acquire properties with little to no money down. It involves selling the property to a second buyer before the initial closing, using the proceeds to cover the down payment on the second property.

Benefits of Double Closing

• Low or no down payment: Double closing eliminates the need for a large down payment, making it accessible for first-time buyers or those with limited capital.
• Increased leverage: By using the proceeds from the first sale to fund the second purchase, investors can increase their leverage and acquire more properties.
• Tax benefits: Double closing can provide tax advantages, such as deferring capital gains or accessing 1031 exchange benefits.

How to Execute a Double Close

1. Find a property to purchase and obtain financing.
2. Identify a second buyer who is willing to purchase the property for a higher price.
3. Secure a contract with both buyers.
4. Close the first sale with the second buyer's funds.
5. Use the proceeds from the first sale to close the second purchase.

Considerations

• Market conditions: Double closing is most effective in rising markets where property values are appreciating.
• Transaction costs: The costs of double closing can be higher than a traditional purchase, including legal fees, closing costs, and taxes.
• Buyer requirements: The second buyer must be creditworthy and willing to pay a higher price for the property.

Success Stories

• A couple with limited cash was able to invest in a rental property using double closing, acquiring a property with a 20% down payment.
• An investor used double closing to build a portfolio of multiple properties, using the equity from each sale to finance the next purchase.
• A real estate developer utilized double closing to purchase and develop a large tract of land, leveraging the proceeds to finance construction costs.