Funding Wholesale Deals

[Robert Burns]

I am at a point in my REI business where funding my wholesale deals is the critical path. I am finding potentially good deals but I am not making offers due to the lack of funding. I've read a ton about private lenders but I am interested in knowing the best ways to find them and also how to qualify them in terms of ethics and quality. I'm in S. Louisiana.

[Joe Dube]

Robert,

Why do you need to fund a wholesale deal? If you find a great deal and put it under contract and sell your rights to the contract for an assignment fee then that's wholesaling. If you find a great deal and buy it with your money, the banks money, private money or hard money and rehab the property then that's a fix and flip or a rehab project.

The best way to start out is to make offers and get the property under contract then look for cash buyers to sell the contract. I would do this strategy first about 10 times before signing on the dotted line and creating debt. This strategy I described is true wholesaling and it's virtually risk free, it enables you to earn money while you learn.

Hope this helps...
Dubeman

[Chris M.]

To get started, consider making offers with no funding in place.

A Proof of Funds letter is easy to come by with some help of fellow BP members.

For the funding issue, make sure you stick to your numbers and don't bid over what you know is the right price for you. This way, you can take advantage of the Inspection period (7 or 10 days usually). You must market your butt off during this Inspection period using every technique you know (bandit signs, craigslist, etc.) If you absolutely must, you can back out of this contract due to your inspection contingency.

I almost forgot, you will have to come up with a $1,000 (refundable) deposit to escrow. This you'll have to pony up.