having someone putting down the earnest money deposit and splitting the fee

is it possible that someone would join you and put the earnest money deposit down on a property to get under contract if you don't have the money and the two of you could split the fee. How does this work and does anyone have any experience in this.

Edited: 06/26/2010 at 10:32AM

Jon Frame

Wholesaler · Nazareth, Pennsylvania

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Icon_minipost Nov 16 '09, 04:50 AM

Absolutely, I've done this many times. Do exactly what you are saying. I'm sure it would have to be a close friend or relative that will trust you. Make sure they also know that it is a risk and they could potentially lose the deposit if you can't sell the deal. Try to keep the deposit as small as possible to keep the risk down. When it sells collect their deposit back and split the wholesale fee, you do all the legwork, everyone's happy.

Edited: 06/26/2010 at 10:32AM

James Hiddle

Real Estate Investor · Altus, Oklahoma

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Icon_minipost Nov 16 '09, 07:25 AM

Are you talking about REO's or standard FSBO properties?

Edited: 06/26/2010 at 10:32AM

Carl Kahkonen

Real Estate Investor · bainbridge, New York

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Icon_minipost Nov 16 '09, 07:50 AM

Standared fsbo properties

Edited: 06/26/2010 at 10:32AM

James Hiddle

Real Estate Investor · Altus, Oklahoma

2515 posts
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Icon_minipost Nov 16 '09, 08:09 AM

Originally posted by Carl Kahkonen

Standared fsbo properties

How much EMD are we talking about? You shouldn't be putting in more that $100 if that.

Edited: 06/26/2010 at 10:32AM

Curt Davis

Wholesaler · Memphis, Tennessee

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Icon_minipost Nov 16 '09, 09:39 AM

If I was a homeowner I would be insulted if someone only offered $100 to lock up my property with some BS contract saying they can assign the home and then walk away if they dont produce a buyer.

Investors like this give real investors a bad name. Dont lock up properties if A. you dont have a t least $1,000 and B. you dont have an exit plan.

Edited: 06/26/2010 at 10:32AM

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James Hiddle

Real Estate Investor · Altus, Oklahoma

2515 posts
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Icon_minipost Nov 16 '09, 09:59 AM

Originally posted by Curt Davis

If I was a homeowner I would be insulted if someone only offered $100 to lock up my property with some BS contract saying they can assign the home and then walk away if they dont produce a buyer.

Investors like this give real investors a bad name. Dont lock up properties if A. you dont have a t least $1,000 and B. you dont have an exit plan.

If you're motivated to sell than you don't give a crap if you are getting money from anyone now do you.

And to say this:

Investors like this give real investors a bad name. Dont lock up properties if A. you dont have a t least $1,000 and B. you dont have an exit plan.

Is not only insulting but way off base. You have your way to wholesale others have their way but it's not giving investors bad names everyone does things differently.

Edited: 06/26/2010 at 10:32AM by James Hiddle

Herb V.

Real Estate Investor · Vicksburg, Michigan

129 posts
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Icon_minipost Nov 16 '09, 11:18 AM

The most I ever gave was $7, usually $1 and sometimes they say keep the buck.
REO's different story. Herbster

Edited: 06/26/2010 at 10:32AM

Demos Loizides

Real Estate Investor · Dale City, Virginia

279 posts
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Icon_minipost Nov 16 '09, 11:31 AM

I gave a $10 bill to the first seller I ever dealt with and she thought I was crazy to give her anything. Earnest money deposits (EMDs) are used as consideration for a contract. Simple contract law says a contract needs three things: 1) an offer; 2) acceptance; and 3) consideration. Consideration basically means we're not getting something for nothing.

I've seen some contracts even use the word consideration as the offer price. Basically, it is. Also, what is the seller getting from us, if we use an Option to Purchase agreement or Purchase and Sale agreement? They're getting our time, effort and money in marketing their house to end buyers. They're also saving 6% as compared to using listing agents to market their properties.

My conscience is very clear, if I leave little or no EMD. In exchange for a seller locking up their property with me, they're getting a lot.

Edited: 06/26/2010 at 10:32AM