All Forum Posts by: Alexandra King

Hi "Savvier-then-me" Investors,

I'm a SoCal investor (wholesaler - only cash sales, no double closes) and have a question about the assignment steps in a wholesale deal, as I have conflicting data about how the procedure is negotiated during the assignment. One school of thought says that you don't have to put down a EMD to put the property under contract for an end buyer; that the ends buyer does this. This means you need an end buyer ready-willing-and able as soon as the property is found. As far as I am concerned this makes me just a Bird Dog, not a wholesaler. Another says you do have to put the property under contract with an EMD and you have 36 hours to do this and to get it to title where the property will be checked for liens and all financials clarified. Then, you search for the end buyer and, once found, get the EMD back + your fee. Which is true? Thank you, Laurie

Hi Kenneth E. - Many thanks for your generous contribution! Question: which of these sources has worked best for you? Alexandra

Hi @ Steven Gottlieb,

Does the software limit you to one area or is it provide state and/or national coverage? Seems for that price you'd get at least your entire state. Laurie

Hi Belinda,

You have experienced my biggest fear - losing the EMD in a wholesale deal. I am still in the formative stages of preparing for wholesaling and have not done a deal yet. Largely because I have these two pressing questions:

1) How do I protect my EMD if the end buyer does not perform? 2) How do I screen end buyers before engaging in a Purchase Contract with a seller?

Here are the answers I have been given:

1) To protect my EMD - Get an option. So, how is that different than an EMD or better yet, what is an option?

2) To screen an end buyer - Have a mortgage broker screen the end buyer and/or, have them provide a bank statement prior to signing an Assignment Contract with them and allowing them to make an offer.

I like the idea of a clause in the assignment contract which disallows a refund unless there is a cloud in the title.

Hi Lance, Dell,

Dell:: Amen on this statement >I have taken enough boot camps in the past and spend enough money on the gurus promoting no money down easy money creative finance deals. I have also learned that when you start asking them real questions about the details they would rather not talk about them.<

Me too. I have been studying the subject for a year - books, YouTube, courses, etc. At the end of each of these sources I have had more questions than I started with. Wholesaling is extremely complicated and difficult, especially without real estate and business acumen. Every state is different, every deal is different and the work itself is hefty. I realize now that the guru model is to craftily feed us skimpy knowledge which sets you up for ongoing "Mentoring" - a source for an income stream that keeps you asking questions, and puts $$ in their pockets. Bottom line: it's not necessary to spend much money on the subject.

That said, you have to put in your due diligence studying the subject and learning as much as you can, but, you can do it through books/online (here) at BP and enlisting a reasonably priced, competent teacher/mentor with experience successfully wholesaling. If you have no money to start out with, offer to give that person a small portion of your first deal to help you get through you through it and see what you think about wholesaling then. Try your local Real Estate Investment Association to find a mentor (REIA). Good luck! Don't give up - just take your time and be smart about it - Laurie

Hi Derek,

This sounds like good advice- thank you!

Laurie

Hi Again, I expect that being taught something in a class with an "Investment Guru" is probably very different than what happens in real life, hence the stream of questions about wholesaling. I am asking for a variety of viewpoints from experienced wholesalers, preferably in the SOCal area. My next question is, how does one qualify an end buyer? Thanks, Laurie

Right.

I am in California and real estate is quite different than almost every other state when it comes to wholesaling. For starters, the cost of coastal property is, incomparable to the rest of the US. Putting 10% of $500,000.00 is a lot different than putting 10% down on a property valued at $70,000.00, right? The EMD is a deposit towards the ultimate sale of the property; it allows me to take the property to (qualified) end cash buyers for their inspection for a certain amount of time ( 7-10-14 days) at the end of which, an end buyer either agrees or not with the figures I have given them (ARV, Rehab costs, closing costs, my fee) and they either purchase it or not. If it sells the seller and I both win, as does the end buyer. If it does not, 7-10 days is not a long time to be off the market, but, 10% of $500,00.00 is a lot for me as a wholesaler to lose. I appreciate the idea of the Option, Jason and Eric and will look into it with a local investor. As for the chicanery of being a wholesaler, well, that depends of the wholesaler. There are many without integrity or good sense. My mission is to honestly and competently serve both sides of the deal as quickly and prudently as possible. This has been a great discussion and will help me to accomplish this ~ thanks everyone! Laurie

When putting a property under contract with an Earnest Monday Deposit, is it possible to lose the Earnest Monday Deposit? How do ensure we get it back if we do not find an end buyer?