If you’re a seasoned investor chances are a double-close deal is already in your wheelhouse. However, for newcomers, this could be a new and confusing term. We sat down with real estate expert Ali Safavi to help us lay out in layman terms what exactly a double-close is and why investors are so keen on doing it.
Ali Safavi explained that a double close is when an investor lines up both the buyer and the seller so that the transaction happens at the same time. Why do this? There are multiple reasons, but Ali Safavi said that typically it’s so that you can use the funds to acquire the new property. This essentially eliminates the need to put your own money at risk.
So now that we’re clear on what a double close is, Ali Safavi has a clear roadmap on how to go about it, “A double-close hinges on your ability to get buyers linked up and interested in your deal.” He’s basically saying that without buyers this whole thing falls apart.
“The first step,” says Ali Safavi “is to find out who your buyers are. Get specs in exactly what they are looking for. Make notes on the conversation you’ve had. What are their hot buttons.” This is the step that probably takes the longest…which is why it’s the most important.
The next step is pretty basic: get the deal.
“Step three is reaching out to your buyers with the news that you have a deal,” says Ali Safavi. “Get them excited.” This is where you can really let your inner salesman shine. Think you don’t have one? Remember when you wanted to borrow the car from mom and she said no? I bet you were quite the salesman then. Same skills, different age.
Now comes the final and most crucial step. “You must get a contract with both the buyer and the seller,” says Ali Safavi. One without the other and the whole thing falls apart.
Still curious? Here’s a video from Ali Safavi that explains it even further.