Double Close vs Assignment: How Wholesalers Make 30% More Per Deal | Carly Stagge, Flip Fund

Mike Hambright (00:33)
Everybody, welcome back to the show. Today I’m here with Carly Stagge. We’re gonna be talking about how wholesalers can make more money on every deal and how you’re gonna have to make some changes depending on what state you’re in anyway. So excited to talk about that. We’re gonna little teaser there, but it’s a way that everybody can make more money on their deal. So Carly, welcome to the show.

Carly Stagge (00:49)
thank you. I’m excited to be here.

Mike Hambright (00:51)
Yeah, good to see you. So,

a newer member to the Investor Fuel family, so we’re really excited to have you in the group. Hey, why we jump in? I know you’ve got a lot of experience as an investor as well. Tell us a little bit about your background.

Carly Stagge (01:02)
Yeah, so I started more in actually commercial real estate, CBRE, and then was in corporate finance for JP Morgan Merit International. So I needed to get back into the real estate space. I didn’t want to do straight residential, didn’t really want to go the commercial route, just wanted more high volume deals.

and found the wholesale industry. This was in 2019, 2020. And it honestly completely changed my life. was the best thing that happened to me. was, you know, saw the market kind of slow down with COVID, know, pick back up, obviously, which was a lot of fun and then, you know, kind of been up and down since. So it’s kind of how I got into it.

Mike Hambright (01:41)
Yeah, and now I know you’re also doing transactional lending, which is one of the main things we’re gonna talk about today. Demystify it a little bit, talk about when to use it and when not to, and why it’s becoming more and more, I would say, popular and more and more of a necessity with some of the laws that are changing as well.

Carly Stagge (01:59)
Yeah, yeah, so kind of you know built built out this transactional fund with some of my business partners You know was in the production side with wholesale for a while switched over to With vertigo real estate ventures and we’re a you wholesale firm in Colorado, California, North Carolina and Florida right now and We just saw the need for double closing which I can kind of get into why we did in a little bit but basically

We kind of wanted to build that out for other wholesalers as well. So we saw the need for it. People kind of came to us. We created a completely separate fund, separate from Vertigo, where we are selling this transactional fund to other wholesalers that needed to double close. I the main reason why a lot of wholesalers are assigning is because they don’t have the funds. And we provide 100 % funding for the same day transactions.

Mike Hambright (02:48)
Yeah, and it

gives you just gives you more control over the deal when you hold the purse strings at least a little bit because when you’re when you’re straight up a signing and there is a fear in the back of your mind of like well What if what if something happens? What if this doesn’t close like whatever and when you’re committed to kind of closing at least at some level Like you just have more control over the deal and inevitably that means higher profits, right? I know you’re gonna kind of talk about when you guys started to started to double close versus

wholesale, you saw your profits go up quite a bit,

Carly Stagge (03:20)
Definitely, yeah, I mean that’s been huge for us. yeah, I was just running some numbers last week and we can use Vertigo as almost like a little case study. And about three years ago, we were doing about a million in revenue and wholesale fees annually. And within three years, it jumped up to 9 million. So I also was breaking that down then per deal.

fees there around 17 and a half thousand assignment fees and pretty much overnight they jumped up to 25 and a half and that’s taking out California with California it’s even higher it’s like 27 28 thousand and I mean

Mike Hambright (03:54)
Mm-hmm.

you started double closing, saying?

Carly Stagge (03:58)
once

we started double closing, correct? Yeah. And I mean, that’s pretty much a 30 % increase overnight, you know, just from double closing. And I feel like a lot of people don’t understand the why of that. You know, it sounds crazy. It’s like, OK, you’re spending more money to close the deal. Why does that make you more money? Right? And I it goes back to that control piece. You know, you have control of the paper. You have that confidence there. You also obviously can.

Mike Hambright (04:03)
Yeah.

Carly Stagge (04:20)
you know, adjust your fees more. You know, once you find your end buyer, technically if you’re signing the deal, you know, you’re not the person that can technically negotiate, you know. But if you are double closing, you know, you are the one purchasing that property. So, you you can renegotiate.

you have just total control of your fees. I think another part of this too that I noticed with doing assignments and then switching, I did double closes for a while personally, switched over to assignments for a little bit and then back to double closes. And another thing that was really big that I think a lot of people don’t realize is the free marketing aspect. So your name is attached to all the double close deals, right? Like the amount of inbound calls that I just get just from being a part of a deal,

probably let’s say one to two a month just inbound that actually end up working out just from someone saying, hey, I saw Carly Staggye on this deal. Are you still looking to buy? First, if you’re assigning, your name’s not attached to these deals. You’re not getting that credibility coming into you. One of my coworkers actually, I was just talking to him about it and he just had a random call. ⁓

two weeks ago actually and it ended up being a $30,000 fee. We sold it in four hours and it was literally from someone he said he saw his name attached to a deal and that’s how he found him. If we assigned that deal, they never would have found him. We never would have got that $30,000 fee. So that’s another big part of it.

Mike Hambright (05:24)
Mm.

Right. Yeah. Some of the platforms like

Investor Lift, Investor Base, like they’re tracking people, if they can tie it back. It’s a little bit different in some states like Texas, non-disclosure state, but if you can track back who the buyer was, then all of a you’re on a potential buyer’s list and people are, you know, sometimes annoyingly so, but maybe bringing you a lot of potential deals, I guess. Yeah.

Carly Stagge (05:55)
Exactly, exactly. And then

I think too, I would do when I was really big in production on the acquisition side is I used to send like the list of all the properties that I’ve done to people to show them that I’m credible. I’ll say, hey, you know, I closed these eight deals last month. Here they are. Here’s my name literally attached to them versus writing down random addresses and no one actually seeing my name attached to them. You know, it also builds up that credibility to sellers too.

Mike Hambright (06:17)
Yeah.

Yeah, so transactional funding has evolved. when I back when I started, you know, in like, let’s say the last downturn 2008, nine, 10, 11, 12, and that range, there were a lot of foreclosure activity. And people use transactional lenders there because they couldn’t assign foreclosure deals or REOs. They generally they had to take kind of take possession at least, but they could double close. And so that was a use case back then. And now there’s obviously a lot of states that are making assigning hard and they all

different laws we’re not going to get into the details of that but it’s having a little bit of a resurgence here with just some laws that are kind of requiring people that were assigning previously you know they’ve kind of made it harder to assign is that what you’re seeing at your end?

Carly Stagge (07:00)
Yeah, definitely. mean, I will say we’ll still do some deals that like people bring us that are from like auction.com and all that, you know, ⁓ where people are needing to double close on those deals. I mean, majority of our clients are just, you know, typical wholesalers that are just wanting to scale their business more. You know, they see the benefit of this. They want the control. They want the credibility and they just want to scale. But yeah, right now, I mean,

Mike Hambright (07:07)
Mm-hmm.

Carly Stagge (07:22)
I don’t know if everyone’s familiar with this, but March 1st, there’s a new FinCEN requirement that just came out. And basically it’s just causing more regulations specifically for cash buyers and people buying under LLCs, which is essentially a wholesaler and investor. And what it’s basically saying is before a lot of the requirements and all the paperwork was just disclosed to the end buyer. So let’s say you’re doing a pass through and you’re taking the end buyers funds to close the A to B side.

The end buyer has to be aware of that, right? Well, now it’s the seller that also has to be aware of all this. So there’s a lot of seller requirements as well. So there’s a lot more transparency in the deal.

And if you’re trying to do pastors or doing assignments, it’s going to cause a lot more red flags for the seller, for the end buyer. You know, I mean, especially if you obviously have a big assignment fee, they’re all going to see that. You know, the seller and the buyer, they’re going to see that assignment fee will be laid out right in front of them, which obviously can cause some issues at times if they aren’t aware of what’s going on in the transaction. you know, the double close aspect obviously helps mitigate this. And talking to a lot of title companies about it throughout the last week when this all just kind of came up

Mike Hambright (08:19)
Right.

Carly Stagge (08:27)
you know, a lot don’t even want to touch these pastors anymore. You know, obviously assignments they might still do, but some of the pastors, you know, they’re just saying, I don’t even want to deal with it because I don’t know what other regulations are going to come up. I’d rather be ahead of it than have to backtrack and get into some lawsuit or who knows what, you know, so.

Mike Hambright (08:39)
Right.

Yeah, yeah.

A lot of people don’t.

I let people forget that a title company is just an insurance company. mean, that literally is, you know, they obviously do the transaction, but they’re just an insurance sales company is essentially what they are. And so if they see it as more risk, they’re like, ah, we don’t need any claims. And just like any other insurance company, like if you’re a bad driver, like they don’t, you your rates are going to be higher than, but the problem is, is like, I don’t know this is true. I think this is true in every state. Like the title policies are fixed, a fixed cost by the state. So the way that they regulate risk is

Carly Stagge (08:49)
Yeah.

Yeah.

Mike Hambright (09:15)
just saying we won’t do that deal instead of like what we’re gonna have to charge you a little bit more for that they just say no right

Carly Stagge (09:18)
Yeah. Yeah,

no, it’s true. But at times too, like you said, like they are the ones that are protected where the wholesale a lot of times isn’t, you know, like the title company is going to make sure that they’re protected for the most part, right? Until they’re not. And that’s when they’re going to say no. But that’s what you see, you know, worry or not worry. Just be aware of as a wholesaler, you know, to make sure that you are protected in that transaction, that everything is compliant.

even if the title company signing off on it, that doesn’t always mean that you’re actually protected or not, of course. So yeah, that’s something too. think just the wholesalers just need to be a little bit more aware of right now with these changes and there obviously might be more and more changes coming up in the near future. So.

Mike Hambright (09:48)
Yeah.

Yeah,

and historically, sometimes people would, that would otherwise wholesale or assign, let’s say, they would maybe do a double close if they didn’t want the buyer to see how much money they’re making. ⁓

Carly Stagge (10:12)
Peace.

Mike Hambright (10:13)
or in some instances the seller, some title companies could do like a blind HUD where like the buyer and seller don’t see the middle HUD that’s yours somehow, I don’t know. It’s like a magic trick. But when you’re double closing, the seller is only gonna see your transaction because they’re not involved in the second side, right? And the buyer is only gonna see your transaction with them. They’re not gonna see that profit spread, assignment fees, anything in the middle, right? Yeah. And that’s probably one of the reasons.

Carly Stagge (10:17)
you

and

you

Exactly. Yeah.

Mike Hambright (10:39)
that you saw average profits go up. one, maybe kind of talk about the other reasons why you think you saw profit go But I know one of them is, subconsciously, investors are a little afraid of showing too much profit. So they might sabotage themselves a little bit by selling it cheaper just because they don’t want to upset anybody, right? Yeah.

Carly Stagge (10:55)
100%. Yeah, I mean, especially

if you already have a large fee, but you could even have a larger one, you’re not going to do it because you don’t, yeah, you don’t want that to be shown on there. You know, I know it’s true. It’s just, I think the main thing with this, it’s, it’s changing one little tweak to your process without changing how you’re buying and selling these deals to clearly grow your profits by 30%. I actually was talking to one of my business partners about this and

He brought up the the Colgate story. don’t know if you know this, but you know, Colgate toothpaste. So P &G, obviously a large, large company Procter & Gamble. They had all these people coming in and they’re trying to figure out how to grow their profits for this for the toothpaste for Colgate toothpaste. And, know, the main ingredients in it is sodium fluoride. Same with every other toothpaste. It’s all the same. OK. And this consultant came in and I can I can send you the article after this, Mike. It’s really interesting. But the summary of it is this consultant

came in and basically said, okay, you’re gonna sign this NDA. I promise you, I’m gonna grow your revenue. I’m gonna double it by next year without changing your product. And they’re like, what do you mean? He’s like, but you have to sign this. So they sign it because they trust this guy. He was a really credible guy. All he did is he took the tube with a toothpaste and just expanded the…

the entry of it just by like, it’s by like a millimeter or something. Like just basically expanded it by like one and a half essentially. Cause now people are using more toothpaste, they need to buy more toothpaste. They didn’t change the product at all. All they did was change one little tweak in the bottle, which literally completely.

Mike Hambright (12:17)
Okay.

Carly Stagge (12:24)
Literally doubled their revenue in a year, you know what I mean? And now they’re now other companies obviously took that as well and started doing the same thing because they were like, of course, like we’re not changing dance. We’re just literally they’re using more, you know, and how I compare that back to this, it’s like it’s one little tweak of, okay, I’m going to take more control. I’m just literally just going to double close on this deal. But everything else is the same. You know, I could do the same amount of deals every year. I can still buy my deals the same way. I can still sell them to investors the same way. All of that.

Mike Hambright (12:27)
Yeah.

Carly Stagge (12:53)
It’s just changing one little tweak to literally double your revenue, at least up it by 30 % overnight, or within a year. ⁓ So I think it’s just kind of an interesting comparison how a lot of times it’s hard to, like no one else was thinking about that. And I think with this too, it’s like, you’re not thinking about that because it seems like an extra cost upfront, but to in turn obviously help you in the long run. I’ve seen it happen personally.

Mike Hambright (13:00)
Right. Yeah.

Yeah.

For real estate

investors, you have to look at ways to squeeze more juice from that fruit that you picked. In your strategy here, you don’t have any additional marketing. You already paid for the leads, so you’ve already got that deal. Quite frankly, if you can find ways to make a little bit more money on each deal, there might be some deals that you would have passed on otherwise, because they seem a little bit too thin that you could still make work. It’s not going to allow you to do every single deal. But ⁓ if you can find more, mean, the money in this industry is really making

Carly Stagge (13:24)
Exactly.

Mike Hambright (13:47)
on the fringe. Like what are the little things you can tweak at both ends and do like a little bit more kind of operational excellence on to help you make more money and so it’s kind of like baseball like you know.

Like everybody’s really excited about these huge profit deals, like a home run, but the real money is made just from being consistently hitting base hits and doing that effectively over and over and over again. And so if you can find some ways to squeeze a couple doubles in there, if you will, to still continue to use this analogy, it makes a world of difference at the end of the year when you’re looking at your numbers. Yeah.

Carly Stagge (14:15)
Exactly. Exactly. I

think that’s the biggest thing. You’re already doing the work. You might as well make a little bit more money on each deal. Why not? I think it’s a no-brainer, honestly.

Mike Hambright (14:20)
Right. Yeah.

Yeah, and

I think, like you said, just to clarify for folks, title companies historically were pretty loose with pass throughs. So even if you were double closing, they would allow this the kind of B to C side to bring them the C buyer to bring the money and close the A to B deal just simultaneously. But because of all the regulation changes, they’re just less likely to do that these days, which is where the transactional lender comes in and is willing to is willing to kind of make that happen.

Carly Stagge (14:49)
Mm-hmm.

Yeah, and I think there also becomes a little bit of stress with that. You know, I’ve talked to some wholesalers about that stress of like, okay, well, what if this doesn’t go through its closing day and relying on the, the C funds, you don’t even need to close my A to B or okay, it’s closing day and they’re finding out that I’m making $50,000 on this deal. You know, you have that stress involved. And I think with these double closes and with this transactional funding, it eliminates that stress, you know, it makes the transaction so much more smooth. And now you can take that time.

Mike Hambright (15:11)
Yeah.

Carly Stagge (15:22)
that you were using towards your stress and basically take that and just put it towards finding more deals. I think that that’s a big part of it too that we realized is like we were dealing with all these regulations with all these loopholes and the minute that we just cut all those out and we just said, hey, we’re double closing these deals, this is how we’re gonna do it. We’ve now, obviously nine times our profit over three years. So ⁓ it’s really made a big difference for us, it has.

Mike Hambright (15:28)
Yeah.

Right.

Yeah, I want to talk a little bit too about,

know, for those that are out there and Carla and I were talking about this ahead of time, there’s always a lot of people that are like, I’m a wholesaler. Like all they identify with being a wholesaler. They all their transactions are wholesale deals. I can tell you that if you’re not using other extra strategies, could be could be whole tailing. It could be fix and flipping. It could be short term rentals. Could be certainly buy and hold, even though those are, you know, rentals are a pain in the butt. But it’s a way to build long term wealth. If you’re not using

other exit strategies. If you don’t have multiple strategies, you are leaving money on the table, no doubt about it. I mean, if you’re only wholesaling, you’re only as good as your last transaction, and that’s that. So maybe just share your experience of the importance of having multiple strategies.

Carly Stagge (16:29)
Yeah, definitely. mean, just kind of go back to when I was in production, honestly, like I love production. My first year in production, personally, I closed over 65 deals, well over a million in wholesale fees just myself and was young and obviously made a lot of money and it was great. But then I realized like

You know, you not only get bored of that, but relying just on that, you know, it’s hard and you obviously want to find other avenues. And you know, that’s when I obviously partnered up with my business partners and we’ve just been brainstorming all these other different verticals of where we can kind of take our company. you know, Vertigo, for example, you know, are mostly a wholesale firm, right? But do some fix and flips, you know, have some rental properties. Now we just launched this transactional fund.

other creative finance deals. have innovation going on right now. We have a whole tail going on right now. But you know, this fund is really like our next big vertical vertical in the company. And you know, we want to keep doing that because like Mike said, you know, you don’t want to make money just one way on a deal. We want to make money in four or five ways on a deal. So, you know, I’d love to have a title company one day, a hard money fund, obviously keep growing this transactional lending fund. Who knows what else, you know, we’re going to have. And that’s our goal with it.

You know, we don’t want just this wholesale side. And the wholesale side is obviously profitable to where a lot of the cash flow comes from. But we want to take that and we want to grow with all these other ways just to, you know, make more money off of each deal. I mean, that’s the end goal to, you know, grow it in multiple ways where it’s just that one.

Mike Hambright (17:57)
Yeah, I’ve been parroting this quote for a while now, but I don’t remember who said it originally. but it was in a book or something I was reading, you know, a couple of years back. It was like the purpose of your business is to get you to the next business. And so like, I’m not, I, I’m also a fan of consistency and focus and things like that. But I do think, I mean, it’s just like me. I started as when people like, well, what do you do? I like, ⁓ that is, I used to be, I used to say I’m a real estate investor, right? And now it’s like so many things have kind of been bolted on along the way.

honestly there’s things that have come and gone for sure as well but it opened like flipping hundreds of houses and coaching people and all it just opens up other opportunities as you go on and I think you know you want to stay true to yourself and have your own goals. For me it almost all still has the underlying foundation of real estate investing ⁓ and you know I still have rental portfolios we’re still fixing flipping stuff all the time like we’ve got a lot going on but

Carly Stagge (18:29)
Yeah.

Mm-hmm.

Mike Hambright (18:50)
you know as you go on in your business you’re gonna hit forks in the road and sometimes you choose to go left versus right and sometimes you choose to go right versus left but you gotta stay true to yourself and you can’t do it all because that’s why you have to start building teams of people that allow you to have more capacity in your business but there are a lot of ways to make money in this business and it’s a shame if you don’t monetize more than one of those.

Carly Stagge (19:03)
really.

And it makes it fun. mean, it’s not that you get bored of the other avenue. It’s just you get excited to learn about the new one. know, like taking over the fund at first, I was a little bit like, I’m going to miss the, you know, the production side and being in the weeds of all the deals and.

I mean, I still, you know, help out with that, but at the same time, it’s, it’s been really cool to learn this whole side, you know, growing a company from scratch and, you know, just, just figuring out all of the little things from building out Salesforce to growing a team to, you know, diving into these requirements, dealing with, you know, all the different title companies. I mean, I went from just working in Colorado to them working in four markets and now this is nationwide. I mean, we can fund the transactional fund and literally every single market, you know, and I’m now I’m learning all the different state requirements as well.

Honestly, even per county, we were doing some deals in Texas and every county is basically like a different state down there. So ⁓ it’s been interesting to learn all of that too. And I’m honestly having a blast with it. more you learn, the more you grow. And it’s been really cool to do that.

Mike Hambright (20:00)
You

Yeah, that’s great. So for those of you who watch right now or are listening, so Carly is involved with Flip Fund. They provide transactional lending for real estate investors, especially those that are wholesaling or those that are looking for just really short term. Maybe just take a moment and just explain how transactional funding works and then tell us how folks can get a hold of you if they’re interested in learning more.

Carly Stagge (20:30)
Yeah, definitely. So yeah, so basically when you need transactional funding and how it works is let’s say, you know, you’re the wholesaler and there’s an A to B contract and then there’s the B to C contract. Okay. So to close on the A to B contract, you know, you’re the B in the transaction. You need funds to close on the A to B. Let’s say you don’t have funds. Okay. A lot of times what you’ll try to do is you’ll try to assign the deal over to the B to C or you try to do a pass through, take the C’s fund to close the A to B. Okay. Let’s say you can’t do that. Let’s say you see the importance of transactional funding.

You want that control. You have a big spread, whatever it may be. So you’ll basically come to us and say, I have a $500,000 property that I need to fund. I don’t have the money for it. For simple math purposes, let’s say we charge you a point. So we’ll say, hey, we’ll charge you a point for this. So it’s $5,000 to basically fund this. So we’ll fund that deal for you 100%. We even cover closing costs or earn us money if you need anything like that as well.

But we’ll just charge a point. And then on closing day, you will be the buyer on the A to B, and then you’ll be able to still close though on the B to C. ⁓ Sometimes it’s a day leg in certain states. We understand that we can still fund on those as well a day or two. That’s completely fine.

Mike Hambright (21:33)
Mm-hmm.

Carly Stagge (21:41)
But that’s basically how it works. then, our deal client obviously is a wholesaler, investor, someone that basically needs to be that closer on that A to B transaction for that B to C. And then, yeah, rate-wise, we’re kind of getting into this industry. What we’ve kind of realized is a lot of lenders, if you look up a transactional lender, most people come up around 1.5%, 2 % in most states. And what we wanted to do was make this affordable. So we came in and we’ll say, hey, we’ll undercut that.

basis points, whether it be 1%, you know, kind of depending on how many deals you do, maybe it’s even cheaper. And that’s kind of our goal is, we want to work with you on this and we want to make it affordable to help you scale your business too. But yeah, to kind of find me, my name is Carly Stagge. I mean, you can, you know, look me up on…

Mike Hambright (22:19)
Yep.

Carly Stagge (22:27)
Flip Fund’s website, on Vertigo’s website, on LinkedIn. Also, you can look up Flip Fund. It’s just flipfundcapital.com. Flip Fund Capital on LinkedIn as well, and on Facebook and Instagram. Same with Vertigo. It’s Vertigo Real Estate Ventures on LinkedIn, Facebook, Instagram as well. So look up either companies and we’d love to connect with you guys.

Mike Hambright (22:45)
Hmm, Carly, thanks for joining us today. Great to see you. Sorry, I got a little coffee in my throat. But everybody, appreciate you joining today. Keep following along. We’re gonna keep giving you tips on how to make more money in your business. So we appreciate you a bunch. See you on the next show.

Carly Stagge (22:47)
Thank you, Mike. I appreciate it. Yes, you too. You’re OK. I’m looking for this.