Understanding A to B and B to C Transactions

1. The Core Mission: Control, Privacy, and Profit

Standard wholesaling via an "assignment of contract" is simple, but it has a major flaw: everyone sees your profit. The end buyer knows exactly how much you're making on the spread, which can create friction and kill deals.

The Double Closing is the solution. It's a strategy where you, the investor, facilitate two distinct but back-to-back transactions:

The A-to-B Transaction: You buy the property from the original seller.

The B-to-C Transaction: You immediately sell that same property to your end buyer.

For a brief period—minutes or hours—you are the legal owner of the property. This structure gives you ultimate control and, most importantly, keeps your profit confidential. The original seller only sees what you paid them, and the end buyer only sees what they paid you. Your spread is your business and yours alone.

This guide breaks down exactly how to fund and execute this play using short-term transactional lending.

2. The Players on the Field

Every double close has a set cast of characters. Know their roles.

Players

Players

Name

Notes

Party A (The Original Seller):

Open

Party B (You, The Investor):

Open

Party C (The End Buyer):

Open

The Transactional Lender (Private Money):

Open

The Title Company/Closing Attorney:

Open

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3. The Step-by-Step Execution Breakdown

Let's walk through the exact mechanics using the clear example discussed in the video.

Scenario:

Original Seller (A) agrees to sell you the property for $100,000.

The seller has an existing mortgage of $50,000.

You have an End Buyer (C) lined up to purchase the property for $150,000.

Your Gross Profit (Spread): $50,000 ($150,000 - $100,000).

Here is the precise sequence of events:

Here is the precise sequence of events:

Step 1: Secure Both Ends of the Deal

Column 2

Step 2: Engage Your Transactional Lender

Column 2

Step 3: The A-to-B Closing (Closing #1)

Column 2

Step 4: The B-to-C Closing (Closing #2)

Column 2

Step 5: The Payout (The Waterfall of Funds)

Column 2

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4. Critical Risk Management: What if the End Buyer Bails?

This is the most common fear and a critical point of failure if not managed properly.

The Power of Earnest Money: As the speaker emphasizes, the process requires the end buyer's funds and earnest money to be in escrow before the closing. If the buyer backs out last minute, they forfeit their earnest money deposit to you, as their contingency periods will have expired. This compensates you for your time and any risk.

Lender Requirements are Your Safeguard: A seasoned transactional lender will not fund the A-to-B deal unless the B-to-C deal is completely locked in. They will verify the buyer's contract and their funds. Their due diligence acts as a second layer of security for you.

The Bottom Line: While a buyer can default, it is very rare in this structure because they have too much to lose. A properly vetted buyer with significant earnest money at risk is highly unlikely to walk away. If they do, you collect the earnest money and relist the property.

5. Key Takeaways & Action Items

Privacy is Power:

The primary reason to use a double close over an assignment is to keep your profit confidential.

Funding is Not the First Step:

Secure your seller contract (A-to-B) and your buyer contract (B-to-C) before you approach your lender. The deal itself is the collateral.

Use a Wholesaler-Friendly Title Company:

Do not work with a title company that is unfamiliar or uncomfortable with double closings or transactional funding. This is non-negotiable.

Earnest Money is Your Leverage:

A substantial, non-refundable earnest money deposit from your end buyer is your best insurance policy against default.

This is a Velocity Play:

Transactional funding is designed for same-day closings. It is not a loan to hold a property. The entire machine is built to execute the A-to-B and B-to-C transactions in rapid succession.

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Novations work when you have the right leads—Prexium brings them straight to yo. Start today 👉

The Cowboy Marketer⁠

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