All Forum Posts by: Ray J.

@Larry Turowski Thanks for that explanation!  I think I will do exactly that, put everything in escrow myself.  If he disagrees, I'll take that as an invitation to find a different deal with someone who can accommodate this.  I don't have a large reserve of cash yet.  I have operating cash reserves for managing my rentals, but this deal will be almost all of my "shopping" cash, so I need to be very cautious.  I'll do it this way until I can get more comfortable navigating this procedure or until I can build a trusting rapport with him or some other wholesaler.  

@Daniel Jahn No problem! I'll update once I've done (or not done) the deal, or if I have any more questions during the process.

@John Thedford That's exactly what I've always thought.  However, while searching for an answer for my questions, I came across lots of threads geared toward wholesalers saying to collect a non-refundable portion of their fee to help guard against people just bailing. Sounds fishy to me, but according to the threads, a lot of wholesalers do it.

Yesterday, a wholesaler and I verbally agreed for me to buy a property from him.  I understand that since it's verbal, anything can happen until we sign a contract, which is supposed to happen this evening.  I understand the concepts and procedures of wholesaling on a higher level pretty well (assignment, double close, etc), but I'm not sure of the EXACT steps to take in the process.  I don't want to get this process wrong, be scammed, or lose out because I did something wrong.

After we talked, he texted me and said we can meet tomorrow (today) and get the contract signed and he needs $1500 earnest money deposit (EMD).  Although he didn't say it directly,  it seemed as if he was asking me to give HIM $1500 EMD.  I may have misinterpreted it, but I know buyers are not supposed to give earnest money deposit directly to a seller, so I asked what title company does he like to use so that I know where to drop the EMD off at (I have no preference, and he has more experience).  We then decided on a title company with no problem.   Am I being paranoid for no reason?

While talking to him, I asked what method of closing he wants to use (assignment, double close...) and he was unsure.  He definitely understands more than I do and knows the pros and cons of the methods, but just says he hadn't decided yet.  So I want to be prepared for either.

He said that he'd meet me with a contract so that we can sign it.  But normally when I buy a house, I make verbal offer, make a contract that reflects the offer, the seller and I sign it, I take it to a title company and deposit EMD and go from there.  I've never had a seller make a contract for me.  Is this normal or does it not matter?

I've also read that wholesalers should take a nonrefundable deposit to mitigate against end-buyers backing out. If he asks for this, how and when do I give it to him? Directly after signing the contract? After depositing EMD with Title Company? Is it not needed if I deposit EMD with Title Company? Do these serve the same purpose or two different unrelated things (EMD vs Nonrefundable deposit)?

Any help or explanation of how you personally do this would be appreciated. Thanks!

@Craig Ward Congratulations!  I'd be proud of that one too!

 In what part of Indiana is your 20 unit? 

@Philip Murray, welcome!  I'm fairly new also and have started investing in Northwest Indiana, specifically Gary so far.  I'm focused on buy & hold, but open to other aspects as opportunities are found.  I just finished up a light rehab on a rental and now looking for contractors for my third project, a more involved rehab on a duplex.  If you want to talk about some investing and ideas, hit me up. Good luck to you!

Thanks @Brent Coombs. I'll keep this info in mind when evaluating my future deals.

@Aja Yasir No, at this point, I'm not selling anything.  If I do in the future, I'll check if you still might be interested.

@James Siller, welcome. I'm a fairly new investor in NWI.  So far, I cash buy, cash rehab, and rent.  I need to start refinancing and repeating, but haven't done that part of it yet. Anyway, maybe in the near future we can work on a deal together.

@Brent Coombs, are you able to elaborate on why they are worth only $45K in the first place? I'm sorry, but I'm still fairly new at this and don't understand what you are trying to say. I'm also investing in the same market, Gary, IN, so your insight might be helpful for both me and @Aja Yasir, and maybe others.  Thanks.

Beginning of last year, in my first rental, my first tenants were my first mistake.  Like your first reason, I didn't properly screen and just went off the reference of someone with whom I had worked. I was just "so excited" to get my first tenant, like many other noobs who aren't properly prepared for what this business has to "offer".  Just 3 months in (after complaining about everything those first 3 months, which I always promptly handled), I got the first phone call about the rent going to be late and it was all downhill from there.  My next mistake was not evicting them fast enough.  My second tenants, who also weren't properly screened, are great so far and still in the house, although it's only been 5 months so far.

I have another SFR coming up for rent next month, so I've been studying screening to help make my chances better this time. It's a mistake I won't make again. Now I'm wondering what my next one will be....

@Eric Meyer Thanks.  Yea, I'm getting the same type of (non) response.