Wholesaling 101

[Toni Romano]

Hi BP!

You will be able to tell how new I am to this industry by the questions I have! ;)

When it comes to Wholesaling I have a few basic questions:

1) If I find a great deal and I put money down because I have an investor who says they would buy the contract from me... he/she could easily "flake" on me right? Then I'm stuck with the contract?

2) Wouldn't sellers automatically deny your offer if you're putting $500 down? That seems like such a small amount and they wouldn't take it seriously.

3) I have read in several places that you should be making 20-25 low ball offers at a time waiting for someone to "bite". If several of those offers are accepted, I'm stuck with putting several hundreds of dollars down in deposits?

Thanks in advance for your responses.

[Anore' Allen]

I am currently under contract with a seller and I paid zero Earnest money (although I am not planning on assigning the contract, we will close first with our own cash). Most of the time if they're hounding you for a deposit they are not truly motivated. 

Buyers can flake out, so do put earnest money in escrow, and never give it to the seller. I feel like earnest money is just to show the seller you're serious, it makes them feel good but so does a sold house. 

I rarely ever get asked to put money down by private sellers, when I say rarely I mean 1 out of 10 MAYBE. all the worries about wholesaling start to vanish once you take action, turns out the things I worried about were easily overcome by positioning myself professionally and building rapport.