Where to get earnest money ASAP?

Question

I am in the process of working towards getting a potential deal under contract. The only thing holding me back right now is coming up with earnest money deposit right now. I was able to find someone to lend me the money for the earnest money deposit. The problem with the lender is the lender is requiring a lot more information about the house than necessary in order for me to get the earnest money.  The lender said I need MLS comps that are within 1/4 mile away from the subject property.

The lender said all comps must be within 6 months old and I also need active, pending and sold comps.
It should also show how many days on market they are. All I need is money to cover earnest money deposit to get this deal under contract. I did not realize it would be this complicated just to get earnest money. The lender is asking for all this information like they are going to provide funding for me to purchase the house to fix and flip. If they keep stalling the money by requiring more and more and more and more information about the house, I could end up losing my chance at getting the home under contract right this minute.

Wayne Brooks · Answer

@Tony Marcelle Okay, to be frank....you have no business trying to wholesale with no money, and apparently a lack of knowledge.  You are totally wasting your time, and everyone else involved in this deal.

Not only do you need EM, for a REO or any other half way informed seller/listing agent, you also have to show the Abitlity To Actually Buy The Property, in Your name, for your offer to even be looked at.  You’re also trying to wholesale a property that has already been exposed to the whole world, and no one has bought it at or near the listed price.....what does that tell you?

I hope you at least realize that you won’t be able to assign any REO purchase contract, right?

It seems like you are dealing with an equally clueless agent if they haven’t explained this to you.

John Warren · Answer

@Tony Marcelle you didn't mention in your post how much the earnest money is or what type of deal you are trying to do. I am not sure that I would personally put an offer in on something if I couldn't come up with the earnest money, much less the down payment. It sounds to me like you may be getting in over your head. You should be able to get all of the comparable information this person is asking for from your realtor, and your realtor should have provided this info to you already anyways so you can know if you are getting a "deal" or not.

Tony Marcelle · Answer

@Brian Pulaski I will just have to wait and see if the seller will bring the price down to what I want. That depends on how motivated they are to sell the house and how much longer they want to keep waiting to sell the house. Since it is a bank owned home, I figure the bank will eventually get tired of holding on to the house for another year and sell it at a lower price that will get the house sold. They seem to be stalling with the earnest money deposit, so I may have to find another source to get the money.

Brian Pulaski · Answer

If the property won't sell, becuse the seller won't lower the price to a realistic number, how are you going to get it so much lower that you can double close it to someone else and make a profit? Seems like a long shot but good luck! Personally I would find a better way to invest someone else's $500

Tony Marcelle · Answer

@Brian Pulaski It is MLS listed. You know I am double closing the property. Right? It sounds like you think I am assigning a contract, which I am not. I could be wrong. The only reason the property is not selling is because the seller will not drop the price low enough. My agent said the seller has already turned down interested buyers who came with offers less than $40,000. I can find a buyer because buyers are interested in this house. I just need the seller to come down more on the asking price of $79,900. My agent said the seller makes monthly reductions to the price, so it may take another 3 to 4 months for the price to come down low enough to buy.

Brian Pulaski · Answer

Was this an MLS listed property? Why would a wholesaler be able to get it "under contract" and then sell that contract, if the other buyers didn't want it to begin with? Seems like you/your company is asking for trouble with this deal. What happens if you can't find a buyer? I'm not sure you can simply walk away giving up someone else's $500 without showing that you attempted to finance the deal.

Tony Marcelle · Answer

@James Caruso The lender is a company that lends money specifically for earnest money deposits. The$500 did not confuse them.

@John Warren The earnest money is my only concern right now. I am almost desperate enough to borrow money from my bank credit card just to come up with the earnest money. You agree with me 100% or someone else?

James Caruso · Answer

You're going to need some capital to get started. I would save up for a few months while learning all you can here and revisit your idea when you got some cash in the bank.

I'm sure your lender was very confused if you were trying to get a loan for $500.

John Warren · Answer

@Tony Marcelle please don't take this the wrong way. I agree 100% with Tony Marcelle. Especially now that I have heard that the amount is $500. If you can't get your hands on $500 then you should be focusing on that issue first before trying to either wholesale or invest in real estate.

Tony Marcelle · Answer

@Wayne Brooks I can do a double close in my company name. That was my intention to begin with. I know I cannot assign REO  purchase.

Where to get earnest money ASAP?

Most Popular Reply