All Forum Posts by: Kim Anderson

Thanks for trying anyway, Bill. I was not thinking about copyright issues when I sent you the PM.

I guess any portions of the discussion that you and Josh deem appropriate and okay to post will have to do.

Bill, I think you have to be a member of the group in order to view the discussions for that group. But if you find a way around that, please let me know. I would love to be a fly on the wall also for this showdown.

I was thinking that the OP was referring to the earnest money deposit that wholesalers typically require from their buyers, although I may have misunderstood his question.

But for what it’s worth, Jerome, you will always want to get a deposit from your buyer for the opportunity to take over your position in your contract with the seller. So at the time when you and your buyer are signing the “assignment contractâ€, have the buyer pay you a non-refundable deposit. If for some reason the buyer ends up dropping the ball and does not actually close on the property, they do not get their deposit back. Wholesalers typically do this so that the buyer has a strong incentive to actually close.

How much for the non-refundable deposit is up to you. I have seen as low as $500 and it goes upwards from there into the thousands. But, $1K or $2K seems to be the norm in my neck of the woods.

You're doing the smart thing in asking all of these questions. BP is such a great place to learn and everyone has given excellent advice to you. As you are taking it all in, don't dismiss Jon's statement about your buyers list:

Begin to build your buyers list so that you have an indication of what your cash buyers are looking for. Are they interested at all in condos or only houses? Do they prefer 3 bedrooms or is 2 okay? Will they only buy block homes or will they buy frame also? Are they buying to fix and flip or buying to hold? Are there specific areas of town or zip codes they are interested in? These are just a few questions to ask your prospective buyers.

This will help you be more effective as to the type of leads you get from your realtor. And it will be much easier for you once you do find a great deal.

At the top right of the page, you'll see the "Search" box. First, click on the drop down menu and choose "People". Next, type in something like "real estate investor Massachusetts". Then click on "Search" and you'll find plenty of people to potentially network with.

Edit: I'm not sure why, but for some reason I did not see Josh's reply before I was typing this. Anyway, do what he says!

Chris is right. You will get a bad reputation pretty quick if you aren’t able to close on the properties you make offers for.

You would basically have to use transactional funding and do a double close. You would get a POF letter from the transactional funding company and submit that letter along with your offer to the bank.

Do you have solid cash buyers already lined up for these properties? If so, the non-refundable deposit that they would give you could be used as your EMD to the bank.

If you and the bank come to an agreement, then they will give you 24 or 48 or however many hours to sign the final contract and get your EMD into escrow. So you would not have a lot of time to try and find a cash buyer in order to use their deposit as your EMD. You would really have to have all of your ducks lined up in a row in order to pull it off.

So otherwise, like Chris stated, you would have to find a partner or perhaps have someone loan you the money.

I think you have to have at least 5 forum posts for your signature to show up.

Other investors usually don’t mind working with wholesalers because it gives their property that much more exposure. But at the same time, like Don stated, they don’t want their property tied up with someone who is “trying†to find a buyer.

If you can’t come up with the money for the deposit, why not let your end buyer pay it. You can do a flex option with the investor seller, which allows you to market their property to your prospective buyer(s). And they can continue to find their own buyers… so the property is not actually being “tied upâ€. Once one of your buyers makes a decision to purchase the property, then the deposit should be no problem for them to pay.

As you already know, building a solid list of active buyers is key with wholesaling. It will allow you to act on these properties quickly and with confidence, without needing to have the deposit.

Ted, in reference to Todd's earlier post...

I agree with you that you do not need to mention the words "dry closing" (or simultaneous closing) to the bank's title company or listing agent.

However, if you're able to find your own title company that still did simultaneous (or dry) closings, you would be able to avoid having to do a double closing. In this case, what you would tell the bank's title company is that your own title company will be doing a "courtesy closing".

The strategy Todd was referring to is outlined here:

http://www.biggerpockets.com/renewsblog/2009/09/10/close-reo-wholesale-deals-part-1-5/

Todd,

That strategy works great, as long as you can find an investor friendly title company in your area that will do simultaneous closings.

Otherwise, you would have to do a double close.