A double close buys and resells a property back-to-back using separate closing statements, while an assignment transfers the original purchase contract to the end buyer for a fee. Assignments are cheaper and faster; double closes hide the spread, avoid disclosure pushback, and work in markets where assignments face legal friction.
What's cheaper — double close or assignment?
Assignment is dramatically cheaper on a per-transaction basis. An assignment requires only a simple assignment contract (prepared by you or a real-estate attorney for $50–$500) and costs virtually nothing to execute. A double close, by contrast, requires title insurance on two transactions ($600–$1,200), transactional funding fees (1.5–3% + $500–$1,500 flat), closing costs on both sides ($1K–$2K), and potentially legal fees ($300–$800) to coordinate.
In total, a double close runs $2K–$8K in hard costs. However, the assignment fee itself (typically $5K–$20K) is negotiated separately—it does not appear as a closing cost but is deducted from the buyer's offer or paid by the seller. Institutional buyers and fund managers often prefer assignments for transparency; retail buyers or less-experienced flippers sometimes prefer double closes because the "spread" is hidden and the transaction appears straightforward.
| Dimension | Assignment | Double Close |
|---|---|---|
| Cost to execute | $0–$500 | $2K–$8K+ |
| Transactional funding needed | No | Yes (typical) |
| Disclosure to end buyer | Often required | Hidden spread |
| Title insurance policies | 1 | 2 |
| Typical fee range | $5K–$20K | $10K–$40K |
| Closing time | Same day | 24–72 hrs later |
| Best for | Clean margins, transparency | Heavy rehab, large spread, disclosure-averse markets |
| Legal exposure | Higher (in 6-state disclosure jurisdictions) | Lower |
Can you do a double close with no money down?
Technically yes, if you secure transactional funding. A transactional lender (Fund That Flip, Groundfloor, or a local hard money firm) will bridge the gap between your acquisition price and your end buyer's purchase price for 1.5–3% of the acquisition amount plus a flat origination fee of $500–$1,500. You must have a signed end-buyer contract (B-C) and proof of funds or a pre-approval letter before approaching a transactional lender.
The mechanic: You lock seller under A-B contract at $100K. You have end buyer under B-C contract at $130K. Transactional lender funds the $100K acquisition price upfront; the end buyer's capital (or their lender's capital) covers the $130K sale price. You keep the $30K spread minus the transactional lender's fees (typically $1,500–$2,000), leaving you $28–$28,500 net. The risk: If your end buyer backs out, you own the property and must cover the hard money interest and carrying costs. Always have a backup buyer lined up.
Is an assignment fee taxable as income?
Yes, absolutely. Assignment fees are ordinary business income under IRS Section 162 and are fully taxable in the year you receive them. For sole proprietors, you report the assignment fee on Schedule C (profit/loss from business). For LLCs, S-Corps, or partnerships, the fee flows through to Schedule K-1 and is subject to self-employment or corporate tax.
The IRS does not allow you to depreciate or defer assignment income. It is 100% ordinary income, taxed at your marginal tax rate (up to 37% federal, plus state and self-employment taxes if applicable). Some wholesalers attempt to characterize assignment fees as capital gains by claiming they are "property appreciation," but the IRS almost always reclassifies them as ordinary income because the wholesaler did not own the property long-term. Consult a CPA or tax attorney to structure your entity and record-keeping properly—assignment income can trigger dealer classification if you execute 3+ flips per year.
Do I need transactional funding for a double close?
In the vast majority of cases, yes. A double close requires you to momentarily own the property between the A-B closing (acquisition from seller) and the B-C closing (sale to end buyer). That ownership, even if it lasts only hours, requires liquidity. Transactional funding (also called "proof of funds" lending) bridges that gap. Without it, you cannot simultaneously close both sides because you have no capital to fund the acquisition.
Some wholesalers use their own cash reserves, hard-money lines of credit, or construction credit lines. However, tying up capital in a double close (even for a day) is inefficient. Transactional lenders specialize in this use case and charge only 1.5–3% plus a flat fee—making it cheaper than deploying your own capital and losing the opportunity cost of that cash elsewhere. Always lock in transactional funding availability before you go under contract with your seller.
Which states require wholesalers to disclose assignment fees?
As of 2026, six states have enacted explicit wholesaling disclosure laws: Ohio (HB 532, effective 2022), Illinois (765 ILCS 77), Oklahoma (SB 1375), Pennsylvania (Senate Bill 1176), Colorado (HB 24-1099), and Kansas (SB 301). These laws generally require wholesalers to disclose their assignment fee or profit margin to the end buyer before closing or allow the buyer to inspect the original contract if an assignment is being used.
The intent is consumer protection—preventing unsophisticated buyers from unknowingly overpaying. In these jurisdictions, an assignment fee of $5K–$20K must be disclosed. This friction incentivizes wholesalers to use double closes (which hide the spread) or to market to institutional/experienced buyers who understand the assignment model. Several more states (Georgia, Indiana, Texas) have proposed similar bills. Always consult your state real-estate commission or attorney before marketing assignments in unfamiliar markets.
When should you use a double close instead of an assignment?
Use a double close when: (1) You operate in one of the six disclosure-required states and want to avoid friction with unsophisticated buyers; (2) Your spread is large ($20K+) and you want to hide the profit margin; (3) Your end buyer insists on not seeing the original seller contract; (4) The seller's lender forbids assignments; (5) You are buying off-market from a distressed seller and the buyer is less experienced (and may reject the assignment when they see the original price).
Use an assignment when: (1) Your end buyer is institutional (a fund, operator, or investment company) and values transparency; (2) Your spread is modest ($5K–$10K) and you are not concerned about disclosure; (3) You want to minimize costs and close speed is critical; (4) You are wholesaling to repeat buyers who understand the model; (5) You are in a state without disclosure requirements.
How does a double close work step-by-step?
Step 1: Lock up the property. Sign a binding purchase contract (A-B contract) with the seller at your agreed acquisition price. Include language permitting simultaneous closings or assignment (clarify with your title company). Example: You contract a fix-and-flip project at $100K ARV for $65K.
Step 2: Find your end buyer. Identify your cash or hard-money buyer and sign a separate contract (B-C contract) at your resale price. Example: Your end buyer contracts to purchase the same property for $85K.
Step 3: Secure transactional funding. Approach a transactional lender (Groundfloor, Fund That Flip, local hard money firms) and provide both contracts. Request a commitment to fund the $65K acquisition cost for 1.5–3% plus fees. Approval typically takes 1–2 business days.
Step 4: Coordinate with title company. Hire a title company with experience in double closings (ask your transactional lender for a referral). Provide both the A-B and B-C contracts. Title will prepare two separate HUD-1 forms / Closing Disclosure documents—one for each transaction.
Step 5: Confirm funding and scheduling. Once transactional funding is committed and title is ready, schedule the double closing. Typically, the A-B closing (you acquiring from seller) happens first; the B-C closing (you selling to end buyer) happens 2–24 hours later, once funds from the end buyer arrive.
Step 6: Close both transactions. Sign all documents for the A-B purchase and B-C sale. Title escrows all funds, coordinates recordings, and disburses the acquisition cost from transactional funding and the purchase price from your end buyer's lender (or cash). You receive your profit ($85K - $65K - $2K transactional fees = $18K profit net).
How does an assignment work step-by-step?
Step 1: Lock up the property. Sign a binding purchase contract with the seller that explicitly permits assignment. Example: "Buyer or buyer's assignee" language—this is standard in wholesale contracts. You contract the same fix-and-flip project for $65K.
Step 2: Find your end buyer. Market the deal to cash buyers, fix-and-flip investors, or hard-money-backed buyers. Present the opportunity at your target price ($85K) and confirm they are ready to close within your contractual timeline.
Step 3: Prepare the assignment contract. Draft (or have your attorney draft) an Assignment of Contract form. This document states: "For a fee of $X, [Your Business Name] assigns all rights and obligations under the Purchase Agreement dated [DATE] with [Seller Name] to [End Buyer Name]." The assignment fee is negotiated—typically $5K–$20K. You can structure this as a one-page addendum or a standalone contract.
Step 4: Have all parties sign. The assignment requires signatures from (1) the original seller (must consent to assignment), (2) you (assigning your rights), and (3) the end buyer (accepting the assignment). Some sellers are hesitant; ensure your original contract permits assignment. Many wholesalers avoid getting seller signatures and instead sign the assignment between themselves and the buyer only—check your original contract language.
Step 5: Close with the end buyer. The end buyer, now holding the original purchase contract (or the contract + assignment), closes directly with the seller. You are not present at closing; you do not take title. The end buyer's lender funds the purchase. Title issues the deed directly to the end buyer.
Step 6: Collect your assignment fee. At closing, the title company or the end buyer's lender wires or cuts a check to you (or your entity) for the assignment fee. Example: End buyer pays $85K; you receive $20K assignment fee; the remainder goes to the seller and their lender/liens.
Frequently Asked Questions
What's cheaper — double close or assignment?
Assignment is cheaper on a per-transaction basis—costs run $0–$500 to prepare assignment contracts, while double closes add $2K–$8K in title insurance, transactional funding, closing costs, and legal documentation. However, the assignment fee paid to the wholesaler (typically $5K–$20K) is negotiated separately and does not appear as a closing cost; it reduces the buyer's available capital.
Can you do a double close with no money down?
Technically yes, if you secure transactional funding. Transactional lenders cover the gap between your acquisition and the simultaneous resale for 1.5–3% plus a flat fee ($500–$1,500). You must have a binding end-buyer ready (A-B contract) and proof of funds or a pre-approval letter before approaching a transactional lender.
Is an assignment fee taxable as income?
Yes. Assignment fees are typically treated as ordinary business income (IRS Schedule C for sole proprietors or Schedule K-1 for partnerships/entities) and subject to self-employment or corporate taxes. The IRS distinguishes between assignment fees (ordinary income) and capital gains (property appreciation); most wholesale assignment fees are 100% ordinary income.
Do I need transactional funding for a double close?
In most cases, yes. A double close requires you to own the property momentarily before selling it on, which requires liquidity. Transactional funding bridges that gap for 1.5–3% plus fees. Some wholesalers use their own capital; others secure lines of credit from hard money lenders or use transactional lenders. Without funding, a double close is not feasible.
Which states require wholesalers to disclose assignment fees?
As of 2026, six states have explicit wholesaling disclosure laws: Ohio (HB 532), Illinois (765 ILCS 77), Oklahoma (SB 1375), Pennsylvania (Senate Bill 1176), Colorado (HB 24-1099), and Kansas (SB 301). These laws typically require wholesalers to disclose their assignment fee or profit margin to the end buyer. Double closes help avoid this friction by hiding the spread.
Are double closes legal in every state?
Yes, double closes are legal nationwide because they are legitimate back-to-back real estate transactions. However, some state bar associations and real-estate commissions require title companies to disclose the simultaneous nature of the transaction, and lender policies may restrict simultaneous closings on certain loan products. Always consult your title company and attorney.
Founder of Home Pros, operator across 48 markets, closed 300+ investor transactions since 2021. Trevor writes for investors and sellers navigating cash-buyer transactions, distressed property deals, and wholesale fundamentals. More about Trevor →