BiggerPockets

Anything will work if you can get someone to agree to it.

Do you have investors you know that want to invest in Real Estate?

Do you know someone (not a Real Estate Investor)who has $500 or $1000 or $2000 that would like to invest it with you?

You could turn anyones money into EMD and pay them $100 or $500 if the deal goes through or double their money if it goes through but nothing if it doesn't, just mkae sure you have you're contingencies so you don't lose your EMD.

Warren Buffet's 2 rules work best:
1 - Don't lose money
2 - Don't lose money

Good Luck

If the issue is that you can't come up with the EM, here are two solutions -- at least one of which should work for you:

1. Find deals that don't require much EM. In my experience, if it's not an REO or a HUD deal, you really shouldn't have to come up with more than $100 for EM for any private transaction with a motivated seller;

2. If you really want to do an REO or HUD deal, and need $500-1000 for EM, sell some stuff to get the money. Honestly, if you can't figure out how to come up with $1000 and aren't confident enough in being able to wholesale a deal where you're willing to sell stuff to get the $1000, you're probably not ready to start doing deals.

I don't mean to sound harsh, but if $1000 is the only thing that's been standing between you and this business for the past 12 months, it doesn't sound like you have your priorities in line.

If I am dealing with a homeowner I almost never put down more than $10.

Any amount of money will give you interest in the property, even one dollar. Only when using a Realtor do I use $1000 or more.

Local customs can vary, so what works here might not work there. When you offer on a REO, you don't actually have to hand over the EM with the offer. Put "earnest money to be provided by certified funds within 48 hours of mutually executed contract." Then, if you do get an acceptance, you have to come up with the EM. No contract - no EM.

On HUDs, at least around here, if you do get an accepted contract, your EM is committed. If you don't close, for any reason, you won't get your EM back.

If you're trying to buy of the MLS you're probably going to need significant EM. If you do your own marketing and come up with your own sellers you may be able to get away with significantly less EM.

I think you're looking for someone to lend you $1000 for EM on a wholesale deal. I think that's a hard sell. That's a tiny bit of cash for an investor, so even if you pay 20% interest the return is very small. The loan is totally unsecured. If your deal falls through, the investor is out of luck. Instead of trying to buy off the MLS, get a foreclosure notice list and start knocking on doors.

Generally, with REOs, listing agents will require that you submit a personal check with the contract for the EM. This check (I actually just submit the same photocopy of a check with every contract) is never cashed, and if you get an acceptance on the deal, you'll be required to provide certified funds in lieu of the personal check.

When the contract is accepted. By the time you actually get word the contract has been accepted, you'll usually need to run to the bank and get a certified check.

I don't know about REOs, but if you are dealing with private sellers, the only reason to even have EM at all is to provide consideration for the contract. Otherwise the contract would not be binding. As Rodney said, shouldn't need to be more than $10.00 - just something to satisfy "consideration". The wholesaler I bought my house from used $25.00 as EM and gave that money to the title company to hold until the deal closed.

J Scott,

My bad. That is just what I learned in a construction contracts and liabilities class - that no judge would uphold a contract that had no consideration for an agreement. I don't have personal experience in court regarding anything beyond traffic tickets, though. :D

You have to really get you mental game together the EMD isn't the problem,IT IS You.(with Love.) It hard to do business when a person's energy is all desparate and negative. People can read that like a book honey, It just repels people. I would suggest get some good reading material LIKE NEVILLE Goddard... he has audio on youtube listen to it. get yourself together and try again. I wouldn't trust you with $5.00 let alone $500. I understand I have been there.