Double Closing vs. Assignment: Transactional Funding

Once you have a buyer for your contract, you have two ways to get paid: assign the contract, or double close. Most first deals are assignments. But when the fee is large, the seller is sensitive, or the buyer is using a lender that will not fund an assignment (FHA’s property flipping rule bars assigned contracts outright), a double close with transactional funding is the tool. Here is how both work, what each one costs, and when to use each.

The choice matters more than most new wholesalers expect. The same contract, the same seller and the same buyer can produce a smooth closing or a blown deal depending on which exit you pick and how early you pick it. The best time to decide is before you send the contract to your buyers, not the day before closing.

Option 1: Assignment

You sign an assignment of contract with your buyer, they step into your purchase agreement, and the title company pays your fee from their funds at closing. One closing, one set of closing costs, and your fee appears on the settlement statement, so the seller and buyer both see it.

Best for: modest fees (many wholesalers use roughly $15,000 as a rule-of-thumb ceiling), cash buyers, sellers who understand you are a wholesaler.
Cost: nothing beyond your normal closing costs.
Risk: a buyer who sees a large fee may try to renegotiate at the table. A non-refundable deposit in the assignment agreement is your protection.

How an assignment closes, step by step

Confirm your purchase agreement allows assignment (the buyer is written as your name “and/or assigns” and nothing in the contract prohibits it).
Sign an assignment agreement with your end buyer that states the fee, the non-refundable deposit, and the closing date.
Send the purchase agreement and the signed assignment to the title company, and have the buyer’s deposit wired to title.
Title prepares one settlement statement showing the seller’s price and your assignment fee as a line item paid by the buyer.
The buyer funds, the seller signs the deed directly to your buyer, and title pays your fee at closing.

Option 2: Double close

You actually buy the house from the seller (the A-to-B closing) and sell it to your buyer minutes or hours later (the B-to-C closing), often at the same title company on the same day. Your profit is the difference between the two prices, and neither party sees the other’s numbers.

Best for: large spreads, sellers who would balk at a visible fee, buyers using hard money or conventional lenders that require the seller of record to be you.
Cost: two sets of closing costs plus the funding fee below.
Risk: you need funds for the first closing, even if only for an hour.

Why do you need your own money for the first closing? Many title companies will not use the end buyer’s funds to pay for your purchase. They want the A-to-B closing funded independently, so each transaction stands on its own. That gap is exactly what transactional funding fills.

What transactional funding is

Transactional funding is a short-term loan — typically same-day to a few days — that covers the A-to-B purchase when you already have a signed end buyer for the B-to-C sale. The lender wires funds to title, the second closing repays them, and you keep the spread. Because the end buyer is already committed, there is no credit check and no appraisal; the lender is underwriting the closing, not you. Short sales are trickier, since the seller’s lender must approve the A-to-B price and some approval letters restrict a quick resale, so learn how short sale wholesaling works before you plan a double close on one.

Cost: commonly quoted as a percentage of the loan amount plus a small fee. For example, at 1–2% that would be $2,000–$4,000 on a $200,000 purchase. Get a written quote before you rely on any number.
Requirements: a signed purchase agreement, a signed end-buyer contract with proof of funds, and a title company that handles double closings.
Where to find it: hard-money lenders in your market, national transactional lenders, and the title company itself, which usually has a short list.

How a double close with transactional funding runs

Lock up the A-to-B contract. Your purchase agreement with the seller, with a closing date that gives you room to find a buyer. Our guide on how to write a wholesale offer covers the terms to include.
Sign the B-to-C contract. A separate purchase agreement where you are the seller and your end buyer is the buyer, at your resale price, with a meaningful deposit.
Confirm the title company will do it. Ask directly whether they handle back-to-back closings and whether they accept transactional funding. Some do not.
Apply with the funder. Send both contracts, the end buyer’s proof of funds or loan approval, and the title company’s contact details. Do this a week or more before closing, not the morning of.
Close A-to-B. The funder wires to title, the seller signs the deed to you, and the seller is paid.
Close B-to-C. Your buyer funds, you sign the deed to them, title repays the funder, deducts both sets of costs, and wires you the rest.

A worked example with simple numbers

The numbers below are illustrative only, to show how the math works. Your closing costs and funding quote will be different.

Say you have a house under contract at $150,000. Based on your ARV and repair estimate, an investor on your list agrees to pay $175,000. The spread is $25,000.

As an assignment: your fee is $25,000, shown on one settlement statement. Your costs are small. But the seller sees a $25,000 line item on a house they sold for $150,000, and the buyer sees that you are making $25,000 on a contract you never closed on. Either one may push back.
As a double close: you borrow $150,000 for a few hours. If the example funding cost is 1.5% ($2,250) and your side of two closings adds, say, $2,500, you keep roughly $20,250. You gave up about $4,750, and in exchange neither party sees the other’s price.

Now shrink the spread to $8,000 on the same house. The double-close costs in this example would eat more than half the fee, which is why smaller fees are almost always assigned.

How to choose

Modest fee and a cash buyer? Assign.
Fee that would make the seller or buyer uncomfortable if they saw it? Double close.
Buyer’s lender will not fund an assignment? Double close.
Not sure? Ask your title company which one they recommend for this deal. They have seen both fail and both succeed.

State rules also play a part. Some states regulate how wholesalers market contracts or require disclosures, and a few treat repeat assignments differently from a double close. Read is wholesaling real estate legal for the general picture, then check your state’s page, for example the Texas wholesaling guide.

Common transactional funding mistakes

Waiting until closing week to line up funding. Funders need both contracts, title contact details and the end buyer’s proof of funds. Start the moment your buyer signs.
Using a title company that has never done a double close. An inexperienced closer can delay the second closing or refuse to use the funds. Ask before you open title.
Ignoring seasoning rules. Some end-buyer loan programs will not finance a property the seller has owned for only a few hours. Ask your buyer what kind of loan they are using and have their lender confirm a same-day resale is acceptable. If the end buyer is a partner or an entity you control, review the related-party rules for arm’s length sales before you book both closings.
Forgetting to budget both closings. In a double close you pay costs as a buyer and again as a seller. Run the numbers before you choose this route.
Having a weak end buyer. The funder is only as safe as your buyer. A buyer with verified funds and a real deposit is what makes the whole structure work. See how to find cash buyers before your first deal.

Double close checklist

A-to-B purchase agreement signed, with a closing date you can meet
B-to-C purchase agreement signed, with a non-refundable deposit at title
End buyer’s proof of funds or loan approval in hand
Title company confirmed for back-to-back closings and transactional funds
Written funding quote received and application submitted
Estimated settlement statements for both closings reviewed
Net profit recalculated after funding fee and both sets of costs

Transactional funding FAQ

Do I need good credit to get transactional funding?

Usually not. The funder is repaid from your end buyer’s closing, so they focus on the strength of both contracts, the buyer’s funds and the title company, not on your personal credit.

Can I double close without transactional funding?

Yes, if you have the cash to fund the A-to-B purchase yourself, or a private lender willing to cover it. Transactional funding exists for wholesalers who do not want to tie up their own capital, even for a few hours. It is a different product from gap funding, which flippers use to cover the down payment and closing costs a hard money loan leaves uncovered.

What happens if my end buyer backs out?

Transactional funding is tied to the B-to-C closing, so if your buyer walks before closing, the funder will not wire. You still have your contract with the seller, and your options are to find another buyer within your closing timeline or to use the exit terms in your purchase agreement. A real deposit from your buyer makes this far less likely.

Does a double close require a real estate license?

In a double close you take title and resell as a principal, which is one reason some wholesalers prefer it. Licensing rules vary by state, though, so read do you need a real estate license for wholesaling and your state guide.

Whichever closing method you use, check every line on the settlement statement in real estate before anyone signs.

Whichever route you use, the purchase agreement is the same. Only the way you get paid changes. The contracts are explained here.

Working a specific market? Our state-by-state wholesaling guides cover the licensing rules, deed records and probate courts for each state and its major cities.

Other ways to fund a deal. Transactional funding is one piece of creative financing. A joint venture partner can cover deposits and costs in exchange for part of the fee, and our guide on how much wholesalers make shows how funding costs affect your net.

Assignment vs. double close at a glance

Factor	Assignment	Double close with transactional funding
Number of closings	One	Two, usually same day
Who sees your fee	Seller and buyer, on the settlement statement	Neither party sees the other’s price
Your cash needed	Usually none beyond your earnest money	Funding for the A-to-B purchase, borrowed for hours or days
Extra costs	Minimal	Funding fee plus a second set of closing costs
Lender-financed end buyers	Many lenders and loan programs will not fund an assigned contract	Usually workable, subject to the lender’s seasoning rules
Best fit	Modest fees, cash buyers, transparent sellers	Large spreads, financed buyers, sensitive sellers

Neither column is “better.” The right exit is the one that closes this deal cleanly at a net you are happy with, and it is worth choosing before you market the contract.

Second worked example: a financed buyer

Also hypothetical. A wholesaler has a duplex under contract at $210,000 and a buyer at $232,000, a $22,000 spread. The buyer is using a hard money lender, and that lender will not fund a purchase from someone who holds only an assignable contract; it wants the seller on the deed to be the party selling to its borrower.

An assignment is off the table, so the wholesaler double closes. A transactional funder quotes 1.5% of the $210,000 purchase, or $3,150. The wholesaler’s buyer-side and seller-side closing costs at the title company come to about $3,400. Net to the wholesaler: about $15,450. Without the double close, the net would have been zero, because the deal would not have closed at all. That is the real comparison to make: not double close versus assignment, but double close versus no deal.

The same example shows why the timeline matters. The hard money lender needs an appraisal and title commitment, which can take a week or two. The funder needs both contracts and the lender’s approval letter. Start both processes the day the buyer signs.

Taxes on assignment fees and double-close profits

The exit you choose changes the paperwork, not the basic tax picture for an active wholesaler. Profit from flipping contracts is generally treated as business income, and the IRS requires Schedule SE when your net earnings from self-employment are $400 or more, with self-employment tax at 15.3%. A double close does add a purchase and sale of real estate to your records, so keep both settlement statements and track the funding fee and closing costs as expenses. Our guide to wholesale real estate taxes covers dealer status, 1099s and quarterly estimates, and a tax professional can tell you how your entity structure changes the result.

Protecting two closings from wire fraud

A double close moves more money through more wires than an assignment: the funder’s wire in, the seller’s proceeds out, the end buyer’s funds in, the funder’s repayment out and your profit out. Every one is a target. The FBI’s Internet Crime Complaint Center counted more than $275 million in real estate fraud losses in 2025, up from about $173 million in 2024, according to NAR’s summary of the 2025 IC3 report.

Verify wiring instructions by phone using a number you already have for the title company, never one from an email.
Treat any last-minute change to wiring instructions as fraud until the title company confirms it by phone.
Tell your end buyer and your funder the same rule so nobody acts on a spoofed email.
Confirm receipt of every wire with the closer before anyone signs.