Real estate investors and wholesalers have long leveraged creative strategies to maximize profitability, and one of the most popular techniques is the double close. A double close, also known as a simultaneous closing, allows you to buy and sell a property back-to-back on the same day, often within hours. This strategy is particularly advantageous for investors and wholesalers who want to capitalize on real estate opportunities without using their own funds to acquire properties. 

In Texas, however, the regulatory framework and nuances of double closings demand careful navigation. Here’s what you need to know to execute a successful double close in the Lone Star State.

 Why Double Close in Texas?

Texas is one of the most dynamic real estate markets in the United States, offering ample opportunities for investors and wholesalers. Whether you’re dealing with single-family homes, multifamily units, or commercial properties, the double close allows you to:

• Protect your profit margins by avoiding assignment disclosures.

• Maintain confidentiality about the purchase price in the A-to-B transaction.

• Legitimize your role as a buyer and seller, ensuring compliance with Texas’ real estate laws.

For wholesalers, a double close can be particularly beneficial when the end buyer is wary of assignment contracts or when the spread between the purchase and selling price is significant.

Texas Regulations for Double Closings

While double closings are legal in Texas, they must adhere to specific regulations. Here are some critical considerations: Transactional Funding Texas regulations require that funds used in the A-to-B transaction come from the investor (B) or a third-party lender. 

This is where transactional funding becomes vital. Transactional funding is a short-term loan specifically designed for double closings, often repaid within 24 hours once the B-to-C transaction is completed. 

Title Companies Not all title companies in Texas are experienced with or willing to handle double closings. Choosing a title company that understands the nuances of double closes and can ensure seamless execution is essential. 

Look for companies that: 

Provide separate HUD-1 or Closing Disclosure forms for each transaction. Have expertise in handling simultaneous closings. Work with transactional funding lenders  Contract Transparency Texas law requires transparency in real estate contracts. While the double close eliminates the need for an assignment fee disclosure, ensure that all contract terms comply with the Texas Real Estate License Act (TRELA)