Working with wholesalers

[Cal Ewing]

Hello, I am looking into the idea of working with wholesalers as a way of acquiring properties. I already am receiving numerous deals in my email inbox from a variety of wholesalers but have not yet pulled the trigger on any deals. 

Can some of you BP wholesalers take me through the process of buying from you? 

Most deals I see have a statement similar to: 

"$2k non-refundable deposit locks up this deal"

So say there is a deal that interests me based on numbers provided and I want to act quickly so as not to loose an opportunity. Do I need to have my own purchase contract ready and send the wholesale company my $2000 along with an offer to purchase? If so, how much time do I have for due diligence? Is it the same as if I am buying off the MLS?

What happens if I see the property and realize that the repair costs are more than advertized and the deal doesn't make sense and I want out. Is that $2k non-refundable deposit truley gone if I back out? 

If this is the case, how can a person look at a lot of deals without blowing all of their investment capital on earnest money for deals that aren't the right one?

Or do I have it backwards? Do I go check out the deal first and try and varify the wholesalers repair numbers before locking up the deal?

Thanks in advance for any feedback on this. 

Cal Ewing

[Account Closed]

@Cal Ewing, don't give any money to a wholesaler without seeing the property yourself unless you are experienced enough to make that call. If you give a wholesaler a $2,000 earnest money deposit that's nonrefundable, it is his to keep even if you go look at the property and realize it's not a good deal.

Don't worry about a deal passing you. There are plenty more that will come and go. Don't rush into something without doing all the due dillegence. Before anything, run your numbers and make sure it's a good deal before you pull the trigger. If the numbers make sense, go for it.

I would take a property you feel strongly about and like I said, run the numbers. Then, run them again. Get an ARV you are confident with. THEN, go look at the property to assess damages. You should know what to work with as far as rehab costs from there. Only then should you talk about going through with a purchase.

And also just a heads up, a bunch of wholesalers are newbies. Wholesalers in general get a bad rep for a bunch of reasons, but if you can find one that's completely legitimate, STICK WITH THEM. Don't just trust any deal thrown your way. Some will literally have a property under contract for $3,000 less than market value and want to assign the contract over to you for a $5,000 assignment fee. I'm serious, these things happen. But again, wholesalers can be super beneficial, so don't let me scare the idea away from you. As long as the numbers all make sense, go with it. Don't rush into it by any means, but pull that trigger when it makes sense!