Flip This Wholesaler

Hello this is the first I'm reading your great blog. What contingencies do you normally use? In the event you don't have a buyer lined do you have anyway out? I like your strategy. When does the bank cash your earnest deposit?

Best of luck,
Matthew

I'm willing to bet the 5K bit separates yourself from "everyone else" which is why the banks take notice.

And that's how it works....see what everyone else is doing (500-1K), then go something 'extraordinare' that separates you from the rest...even if not 5K, 3K would probably still make them take a bit of notice...

Matthew, I was using an inspection contingency (usually 3 days), but have gotten rid of it.

I try not to contract anything unless I have a buyer already in mind, or unless it is such a steal that I'm positive I can sell it. I also know a few investors with cash who will partner on the deal with me if it is good enough, so I usually check with them first to see if they are comfortable closing on it if I can't find a buyer in time. I've only had to do that once, and ended up reselling it in a few weeks, and we both made some cash.

Backing out of a deal is a big no-no in my book, so I try to have all of my bases covered before I commit to something.

Hello, Thanks for taking the time to reply! One more question, promise. How do you get into these properties to show your investors, does a listing agent cart you and your investors around? Are you a realtor?

Regards,
Matthew

Matthew,

Most of the REOs are on coded lockboxes, and the listing agents will just give out the code a lot of times. Not sure if they are supposed to, but they do.

Most of the wholesalers just give the code to their prospective buyers, and they go out and look on their own.

Thats awesome Steph...CONGRATS!
Those are some great tips too on how you have your contract set up...
Keep plugging for a record breaking month...
Ed (Upstate NY)

Thanks Ed! :)

Matthew, I forgot to answer your question about the earnest money- usually they will have you FedEx the deposit to the bank's title company (they almost always require a money order or cashier's check)after all of the bank's addendums have been signed by both parties. You can also wire the funds if you are afraid of your money getting lost (I had a 1k cashier's check go mia for a week or so).

Hi Steph,
So does the bank cash it before or after closing? I don't have $1000.00 to put up, but if they cash it AFTER closing, then I can use the money from the buyer for the earnest deposit..if that makes sense??

Thanks,
Matthew

I think the question here is - Where is the $5K coming from? Your money? Partners money? HML? End buyer?

Steph - If you could shed light on this it would be helpful.

Thanks - Neill

Matthew and Neil-

The deposit is required as soon as the contracts are signed. Sometimes it takes a couple of days for the bank to get everything signed (not always,though), so, you can be looking for a buyer while you are waiting. I did not have the money to put up deposits for my first few deals, so, as soon as I got a good counter offer, I would call my buyers and see if they were interested, and at what price, and then I would only move ahead if they said they would buy.

I just got 2 offers accepted recently and I offered 5k deposits on each one of them. I only had the funds for one of them, so I asked another wholesaler that I know if he would be willing to put up the money and split the profits. He agreed, and that's what we did. I knew the deals were good enough at the prices I offered that I would be able to find someone to partner with me if they got accepted.

Long story short....you will need to come up with the earnest money deposit within a short period of time after your offer is accepted. It can be your cash, your buyer's cash, or a partner's cash- just know that you are going to have to get it from somewhere, or you are going to burn a bridge with an agent and look like a rookie.

Make sense?

Hi Steph,
I'm following you now. Thanks for the clarity!

Matthew

Yep - All clear now.
Thanks - Neill