Rookie Mistake: I Lost Money to a Wholesaler
First of all, I'm not a rookie, but I behaved like one, and I write this post as more of a cautionary tale rather than an attempt to seek advice. I know I should have done more due diligence, and I know what my options are to attempt to remedy the issue. Giving non-refundable deposits to wholesalers to "lock up a deal" whereby the check is written to the wholesaler has become customary in the wholesaling world of real estate in the Houston, TX market (I can't speak for other markets). In May of 2015, I gave Troy Joyner or FPM Houston Homes and FPM Development a $3,000 check to lock up a $85,000 house located at 2710 Wheeler Street Houston, TX. As the closing date approached, Troy had excuse after excuse as to why the closing was being delayed. Then he went silent. I later learned that he entered into multiple contracts on the same property, and he did this with other properties at the same time. Multiple investors are now attempting to locate him in an attempt to retrieve their money. Though I had met Troy in person on a couple of occasions at networking events, I did not know him that well. At the end of the day, giving a wholesaler a deposit is the same as giving him or her a short term unsecured loan only you have a contract instead of a promissory note. I learned that I need to a) do more due diligence on the title of the property and b) do more due diligence on the wholesaler prior to writing a check to the wholesaler for any kind of deposit. I am embarrassed that I let this happen to me, but, even more so, I don't want it to continue to happen to others. Be careful out there; don't let my $3k mistake be your own.