Assignment vs double close: which should I use?

How an assignment works

An assignment is the simpler structure. You sign a purchase contract with the seller, then sell your position in that contract to an end buyer for an assignment fee. One closing happens: the buyer closes directly with the seller, you never take title, and your fee is paid at closing, typically as a line item on the settlement statement.

It is cheap and fast. There is no second set of closing costs and nothing for you to fund. The trade-offs: your contract must be assignable, and your fee is usually visible to the buyer and, in many closings, the seller.

How a double close works

A double close is two back-to-back transactions: you buy from the seller (the A-to-B closing), then sell to your end buyer (the B-to-C closing), often the same day. You actually take title, briefly, and your profit is the difference between the two prices rather than a disclosed fee.

Because you are genuinely buying the property, you need funds for the A-to-B closing. Many wholesalers use transactional funding, short-term capital lent for hours or days, commonly priced around 1 to 2 percent of the amount borrowed. Some title companies allow the end buyer's funds to cover both closings, but many do not, so confirm before you rely on it.

The cost difference, worked example

Say you have a contract at $140,000 and a buyer at $170,000, a $30,000 spread. As an assignment, you collect roughly the full $30,000, minus perhaps a small transaction or attorney cost.

As a double close, you pay closing costs on the A-to-B purchase, often $2,000 to $3,000, plus transactional funding of roughly $1,400 to $2,800 on $140,000, plus possible extra title and recording fees. Net: somewhere around $24,000 to $26,500.

That $4,000 to $6,000 difference is the price of privacy and structure. On a $10,000 spread it is hard to justify. On a $40,000 spread it is often worth every dollar.

When to assign

Assign when the fee is in the range buyers expect and will not fight over, when the purchase contract permits assignment, and when the deal type allows it. Speed favors assignment too: less paperwork, no funding to arrange, and fewer moving pieces at the closing table.

When to double close

Double close when the spread is large enough that a visible fee could blow up the deal, when the contract prohibits assignment, or when the seller's side restricts it, as many bank-owned, REO, and short sale contracts do. Some end buyers' lenders also refuse assigned contracts, which forces a double close even on modest spreads.

One caution: wholesaling rules vary by state, and several states have added licensing or disclosure requirements in recent years. Whichever structure you use, have a local real estate attorney review your contracts and confirm what your state requires.

Underwrite both sides either way

Structure is downstream of the numbers. Neither an assignment nor a double close saves a deal where the ARV is wrong or the fee exceeds what the spread supports. Screen every contract the same way: comps for ARV, a rehab estimate you can defend, and the buyer's exit underwritten before you commit to a structure.

If you want the multi-exit math run for you, Realastat underwrites the same property as an assignment, flip, BRRRR, and rental from a listing screenshot in under a minute, so you can see which structure and which buyer the deal actually fits.