Due Diligence Fees - Good or bad??

4 Replies

Good morning!

Are due diligence fees customary when purchasing from wholesalers?  Should I be leery about paying since I don't get that money back?  Is a $2,000 DD fee reasonable on a $30,000 property?  The amount of work to get it ready for rental is about $15,000.  

@Tomiko Graves No that's not normal. I would not work with a wholesaler who tried to pull that on me. There are some honest wholesalers out there but there are a lot of scum bags looking to make a quick buck too. Be careful. The only entity that gets money before closing is the title company if you are putting any earnest money down.