Need EMD before wholesaler will share address??

Question

Is it normal for a wholesaler to ask for an EMD before sharing a property address?

All the information I got from the wholesaler about the properties was:    3/1, 756 sqft, fully renovated, full finished basement, management in place, tenanted with rent at $750/mo; Asking $51k.

He would not share the address. After much back and forth, I finally got a zip code. For Detroit, a zip code is just not enough information for me. Every block is different.  Am I missing something? How is it possible to analyze a deal without the address? How can you justify potentially losing your EMD for something completely unknown?

Any thoughts if this practice is normal?

Patrick Sweeting · Answer

Big red flag. If the principal truly has a contract and equitable interest in the property there shouldn't be an issue on their end sharing the address, comps, photos, property analysis, etc.

EMD without the property address? Plenty of deals and reputable people out there to do business with. My opinion, run the other way.

Jeffrey Shipp · Answer

HI Samantha,

unfortunately many wholesalers just don't know what they are doing. If he will not give you the address he either does not have it under contract or is trying to sell someone else's deal just walk away there are so many other deals. if you are looking in Detroit you are right it goes BLOCK by BLOCK always drive the area. If you need anything let me know I'm always willing to help.

Samantha B. · Answer

Originally posted by @Bill F.:

Out of curiosity, where does the wholesaler want you to send the EM? To him, an escrow company?

He did not say where to send the EM. It seemed too weird to me, so I decided to move on. Thanks for your insight!

Originally posted by @Jim K.:

Bill's point is the most important here. Who does he want you to make out the check to? I've never paid earnest money without inspecting a property myself. But then again, I tend to stick to agents and not wholesalers to buy my houses.But knowing where he wants the check to go to might help you decide if he's just a completely clueless newbie or actively trying to pull a scam. He might very well have a place and is terrified of you going behind his back because he doesn't trust you or the seller.

I do not know who he wanted the check made out to. I decided not to ask and to move on to something less sketchy. I did look up his LLC, and it is registered as a nonprofit. It seemed too weird to be a nonprofit wholesaler. Thanks for sharing your knowledge!

Thanks everyone for helping this newbie navigate past a likely scam!

Jim K. · Answer

@Bill F.

Bill's point is the most important here. Who does he want you to make out the check to? I've never paid earnest money without inspecting a property myself. But then again, I tend to stick to agents and not wholesalers to buy my houses.But knowing where he wants the check to go to might help you decide if he's just a completely clueless newbie or actively trying to pull a scam. He might very well have a place and is terrified of you going behind his back because he doesn't trust you or the seller.

Bill F. · Answer

@Samantha B. Not jut NO but HELL NO. You don't send the EM until you have a signed PSA. PSAs have this weird thing where they have to have an actually address/parcel ID.

Out of curiosity, where does the wholesaler want you to send the EM? To him, an escrow company?

Jamiel Strickland · Answer

@Samantha B.

I wholesale in Detroit and when I have a home under contract I send to my buyers/investors with ADDRESS, PRICE, 100 PICTURES INSIDE AND OUT THE HOME, AND A SMALL DESCRIPTION OF THE HOME. We do not ask for EMD until after you have physically walked the property yourself or have your personnel ( inspector, realtor, contractor, business partner, family member) do so. We only ask to show proof of funds before but not a deposit.

Sorry to make everything bold lol, its wholesalers who make other wholesalers look bad. My team and I base our wholesale business off clarity and transparency so when I see wholesalers in Detroit doing things that can come off "shady" makes me very upset.

David Avetisyan · Answer

Personally, it sounds awfully sketchy.

I would, at most, show proof of funds and request an address. If your getting the run around, just move on from the deal.

To your success!

Wayne Brooks · Answer

Hell no.

Need EMD before wholesaler will share address??

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