The decision in brief
Wholesalers use transactional funding when an assignment will not work: the contract forbids assigning, an MLS, REO or government addendum bans it, state rules restrict assignments, or the spread is big enough to keep private. The lender funds your purchase from the seller, and your end buyer's money repays it at the second closing.
View Transactional Funding →Assignments are the default for most wholesale deals, and for good reason. They are cheaper and simpler. But there is a set of deals where a double close is the better exit, and some where it is the only one.
Why not just assign every deal?
An assignment of contract means you sell your right to buy. The end buyer closes directly with the seller, there is one closing and one set of costs, and your fee is paid at that closing. The trade-offs:
- The assignment fee is visible on the settlement statement.
- Not every contract, seller, listing or end buyer's lender allows assignment.
If your deposit was EMD funded and you assign, the funded EMD can stay on the deal, but the new parties must also sign for the EMD so it remains assignable.
A double close (an A-B-C close) avoids both problems. You actually buy the property from the seller (A to B) and resell it to your end buyer (B to C). Nothing is assigned, so your spread never reaches the end buyer's settlement statement. The cost is a second set of closing costs plus the funding fee.
When does a double close make more sense?
These are the situations where wholesalers come to Axelrad for transactional funding:
- The purchase contract forbids assigning. No assignment clause means no assignment.
- MLS, REO or government contracts. Listing addenda on bank-owned and government properties often ban assignment.
- State restrictions. Some states restrict wholesaling by assignment or regulate how contracts are marketed.
- A large spread. If the end buyer seeing your number could kill the deal or start a renegotiation, keep it off their paperwork.
- Land deals. The structure works on land too. Axelrad's transactional funding covers land deals, and our EMD funding covers the land deposit when you sign.
- An end buyer who wants to buy from the owner of record. Some buyers and their lenders do not want to close on an assigned contract.
What are the pros and cons of each?
| Assignment of contract | Double close | |
|---|---|---|
| Closings | One | Two |
| Closing costs | One set | Two sets |
| Funding needed | Usually none for the purchase | Transactional funding or your own cash for A-B |
| Your fee visible to the end buyer | Yes, on the settlement statement | No, nothing is assigned |
| Works when assignment is banned | No | Yes |
| You take title | No | Yes, briefly |
How do the numbers compare?
Run both exits before you decide. Here is a hypothetical example, not a quote: a $200,000 purchase resold for $230,000. With a transactional lender advancing $195,000 (after $5,000 of earnest money) and an assumed funding fee of $1,950, and $5,500 in combined closing costs across both closings, the wholesaler keeps $22,550.
An assignment on the same spread avoids the second closing and the funding fee, so it usually nets more if it is available and the visible fee is not a problem. Our assignment vs. double close calculator shows both nets side by side on your own numbers.
What do you need to get funded?
- An executed A-B purchase contract.
- An executed B-C resale contract.
- Proof your end buyer's money is real: proof of funds for a cash buyer, or their lender and open conditions if they are financing.
- A title company or closing attorney ready to close both legs.
Axelrad does not pull credit or run a background check on transactional funding, and does not require entity seasoning. See the product page for current terms.
Does the seller know you are reselling?
On the A-B closing, the seller sees a cash buyer, because on that closing that is exactly what you are. Whether you have any disclosure obligations to the seller or end buyer depends on your state and your contracts. Separate closings do not remove disclosure duties, and both transactions are known to the title company running them. Ask a real estate attorney what applies to you.
What about restrictive wholesaling states?
State rules on wholesaling, contract marketing and disclosures vary, change over time, and title companies set their own policies on double closes. A structure that works in one state may not be allowed in another. This is general information, not legal advice. Check with a real estate attorney in the property's state, and read is transactional funding legal? for what to check first.
Does the end buyer's financing matter?
Yes. Cash and financed end buyers both work, but some loan programs restrict quick resales. Federal rules generally make a property ineligible for FHA-insured financing if it is resold within 90 days of the seller's acquisition (24 CFR 203.37a). An end buyer using that kind of financing is usually not a fit for a same-day double close. Ask how your buyer is paying before you sign the B-C contract.
Key takeaways
- Assign when you can; double close when the contract, listing, state rules or spread make assignment a bad fit.
- A double close keeps your spread off the end buyer's settlement statement, at the cost of a second closing and a funding fee.
- Transactional funding covers the A-B purchase; the end buyer's money repays it at the B-C closing.
- State rules vary. Confirm your structure with a real estate attorney and your title company.
Talk to Axelrad
Got a deal you cannot assign? Send both contracts through Axelrad's application and see the transactional funding page for current terms.
Frequently asked questions
Why would a wholesaler double close instead of assigning?
Usually because the contract forbids assignment, an MLS, REO or government addendum bans it, state rules restrict it, or the spread is large enough to keep private. A double close transfers title twice instead of selling the contract.
Is a double close more expensive than an assignment?
Yes, usually. You pay two sets of closing costs plus the transactional funding fee. Compare the net of each exit on your numbers before choosing.
Can I double close an REO or MLS deal?
Often, yes. Axelrad funds MLS, REO and government contracts, including those that forbid assignment. Confirm the title company will run both legs.
Will the end buyer see my profit on a double close?
Not on their settlement statement, because nothing is assigned and the two sales are separate. Disclosure rules vary by state, so confirm your obligations with a real estate attorney.
Can I get transactional funding as a new wholesaler?
Yes. Axelrad underwrites the deal, not your history, with no credit pull and no entity seasoning.
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