The Famed Simultaneous Closing in Real Estate Investment

by : Judson Voss

There are many ways to close a deal in real estate investing. As a foreclosure investor you've probably heard of the famed, simultaneous closing, when purchasing a property from the homeowner. It's a great way to make a profit on your time and effort without using your own money to purchase a property.

A simultaneous close is when you buy the property from the homeowner and then immediately turn around and sell that property to an investor. You very often are only on the title of the property for a few minutes at a time. Plus, you can often arrange the deal so that you end up buying that house with your investor's money!

How the Simultaneous Close is Initiated
You initiate a simultaneous close on a property sale by asking your investor to wire their money into the title company that you are using for escrow. You have already given the title company prepares the two closing documents; one is where you buy the house for $70,000 and the other is where you sell the house to your investor for say $90,000. That means you get a profit of $20,000 after both closings are complete.

When the title company prepares both of these documents at once, they'll notice that your buyer has already wired their money into the company's escrow account. The title company will see that when you sell this property to your buyer you'll be getting $90,000 and that the buyer has already transferred his or her money into the title company.

So, rather than asking you to wire your own money into the title company so they can initiate the first sale (from the homeowner to you) they'll just use $70,000 of the $90,000 that's been transferred into the title company by your buyer. Then, they'll turn around and complete the second sale (from you to the buyer) and leave you with $20,000 profit without even using your own money!

Basically you've just 'flipped' a house, which in proper terminology is referred to as 'Wholesaling' a house and all without using your own money! As you can imagine there is a little more to the process of making a simultaneous close, but this is the gist of the procedure. It's an excellent way to get involved in real estate investment and get profits with very little starting cash.