I am just starting in real estate investing and found a decent deal with a wholesaler. On this deal, there was a $5K nonrefundable earnest money deposit and of course the house was being sold 'as is' - and the buyer would not be able to see inside the home. There were a few pictures provided.
I was worried about due diligence - how would I know if the title is clean and how would I know if there were serious problems with the house without a home inspection? How do you do due diligence in wholesaling scenarios without potentially losing your earnest money deposit and title search fees? I know I can do a preliminary title search on my county's website. But, I'm definitely not an expert at reading and understanding titles. I think the county's information may be missing other judgments and liens???
Would someone be able to outline for me how they would purchase a home from a wholesaler while still doing due diligence?
Thank you so much!
Sounds way too risky for me.
$5k non refundable! What are they trying to hide by not allowing you into the home?
I would wait for a deal that doesnt put your $5k on the line like that. Do a deal where you are able to walk the property and do proper due diligence.
Antoine - What does a typical wholesale deal look like?
Never purchase without due diligence.
Let me know if you have further questions! 💁🏼♀️
What does due diligence look like in a wholesale scenario? I'm just curious if I should even pursue wholesales or not...
Hi @Rachel Meyers ,
A typical wholesale deal does work with a 5K non refundable deposit; however at a minimum you can do a walk through the property to estimate your rehab cost. In addition if they are not able to provide clean and equitable title your 5K should be refunded back to you. In this scenario it is too risky to pull the tigger without seeing the property if you do not have an existing relationship with the wholesaler and its someone you trust.
Have a Bless day.
@Joaquin Rosario thank you, that's exactly what I needed to know!
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