Help On This Doulbe Escrow Question
I have been BirdDoging for some of my investors and have decide to make a little more money. I am able to buy properties at a discount and sell them to my investors. The question I have is how do I do a double escrow? Do I do this threw a title company or an escrow co.. Since the deal are all cash do i have to disclose to the seller about the buyer. Can anyone please help.[ Edited by more3254 on Date 06/01/2004 ]
3254
The double escrow. I usualy do them with an escrow company I know and do a lot of business with them.
I opened the first one and the Seller signs instructions and the Deed. I then hold that escrow open. I now sell the property and once again the Buyer signs in to that escrow and also signs full escrow instructions.
I then instruct the escrows to close in order. First one records and the second records right behind them next numbers on deed.
I execute whatever deeds are required and I try to get the title company to hold down their title costs with a single policy and I also bargain with the Escrow company to hold down their costs in view of my continued use of their company.
Thats it. Enjoy Lucius
Which Escrow company do you use? do they do out of state closing?
You can make some money with double escrows as you are already thinking. Similar to assignments though you might be looking to sell to a retail buyer to max the value to you.
Any particular reason for selling vs. holding? If you could make the deal work (better financing, a partner, what ever) would you hold?
Put another way are these properties that the other investors want to hold long term?
John
[addsig]
I don't what to hold long term. I am getting these house at a 68% discount and then want to sell them to my investor for 2% higher at 70%. I am dealing in high end homes with big spreads. I just would like help putting the deal together. Like do i have to disclose to all party? And how to deal with the property being in one state and the investor being out of town.
Dear more3254,
Some call this practice a gray area. Some are convinced that simultaneous closings are nothing but illegal loans disguised as sales. Others are willing to take the
risk, knowing fully well that there is a legal risk as to the question of whether the substance of the transaction is a loan or sale and that the properties involved and/or the payors involved are of poor
quality and/or a fraud.
I call it advence FLIP!
I would wait to see if (apparent) veteran poster Lufos come back with an answer to your question as to who does he use for escrowing his double or so called simultaneously closing transactions but in my experience it is always better for investor to do his flip transactions using 2 RE purchase contracts even if the first one(original one with true seller) states Buyer:" "Joe Flippy and/or assignees", technically allowing him or her (if he wear skirt) to flip with profit and without further owner's consent.
Open your yellow page book and start calling escrow companies in your aria. Ask them if they would do double escrow with pass through title insurance and escrow cost.
Hay Lufos, if you do not mind, may i ask how many of such simultaneous closing transactions did you do last year? I would like to consult with you on several fine point if you do not mind?
Duncancun 8-)
[ Edited by HaystagREI on Date 06/03/2004 ]