Are there any EMD Lenders?

34 Replies

Hello BP,

I am reaching out to inquire about EMD lending. Are there private money lenders who fund EMDs only? Trying to research available options where the effort exists, offers are being accepted, but the credit situation isn't the best. I have 4 offers I can move on right now but I do not have the funds for a "required" EMD. I do not have family or friends that could help (already exhausted that possibility) and I have a PT job that will take some time to accumulate the funds. Any advice would be deeply appreciated.

Thanks In Advance,

Maybe I'm misread something and am just really confused here but how would using a private money lender to just fund an EMD help your situation? Are you wholesaling? If not and you don't have an EMD, how will you fund the deal? I'm not trying to be funny here, I'm just trying to better understand the situation.

Remember though.. pretty much everything in real estate can be negotiated. Is it possible for you to negotiate that initial EMD to a lower amount? Is it possible to give a $100 EMD now and then negotiate with an additional deposit later on during the process.. maybe say after an inspection?

Hopefully, you find this helpful.

Thanks for your immediate response @Christopher Giannino . To clarify, I am wholesaling MLS properties that require an EMD. Although small compared to other figures I've heard about (10%), I do not have the funds to do so. My goal was to wholesale to build capital for flips or buy&holds. Basically, I did not want the lack of money to be an excuse for getting started. Now that I have a foot in the door, I am finding it difficult to move pass securing the deal. Negotiating the purchase price, has led to higher EMDs and fewer inspection days. An EMD of $100 has always been in my contracts. I'm not sure if a private money lender would be my answer, but any creative ideas would help.

I don't mean this to offend you in anyway but if you're not able to afford the EMD, I don't think you should be wholesaling. If you even had a single wholesale deal that went through, that should give you enough funds for your EMDs. A private lender isn't going to just give you money for EMDs unless you have some kind of established relationship with them or a proven track record. I would say take out a credit line if your credit is good enough and you really think you'll succeed. Even then though, you have nothing to fall back on if you lose your EMD and your outside of you contingency periods.

I agree with @Joe Won even if the earnest money got as high as 2000 or more that shouldn't be a big factor. If however they are asking for 10k or so that is kind of a large chunk of money and I would wonder what their deal was. I have seen $1 earnest money deposits, earnest money shouldn't be that big of an issue. 

That all being said, if it is an issue for you, have you considered a car title loan, I mean I wouldn't do it personally but if you had no other recourse and you knew that you could move these properties and you are so certain to make all your financial dreams come true if you just had access to x amount, well it is an option. Pawning some items for the short term loans might work as well, I mean again this feels wrong to advise someone to do but you asked a question and I am just trying to give you options. A small personal loan from a bank if possible, is something I have heard of but never really looked into, I understand that they can do small personal loans. Google is powerful, enter the amount you need and how, it should pop up with something. Best of luck!  

Not offensive at all @Joe Won . I have much thicker skin than that to offend me. Anyway, I am a beginner and have exhausted every means of disposable income to "gurus" and marketing. So no, I do not have enough funds for an EMD. Will I allow that to stop me...NOT at all. I inquired because I believe there's a resource that exists or there's a creative way to get this done. This is why I am reaching out to BP. I will wholesale and continue to work hard for my breakthrough and future success in this business. What one person won't do, someone will. I just have to find the right person to believe in me.

Thanks @Zachery Buffin . A $100 EMD does not work for MLS properties (in my experience), so I doubt if $1 will. If it were that easy, I would have closed on my deals long time ago. I would've had the funds already if buyers did not back out of deals right before closing (on my off market deals). I won't squawk about it, but will find another way to make ends meet. I will check out the website you provided. Hopefully, it yields a breath of fresh air. As you know, this business isn't easy to get into and all the promises of "no cash or credit" are deceiving. There are needs for some form of cash or credit to maneuver in REI whether it's a down payment, points on a loan, personal guarantee, EMD, etc etc.

I will admit that I have more resources at my disposal than most wholesalers and am a licensed agent as well and that helps somewhat. I have done MLS deals with very low deposits before but usually I have leverage on my side. The property has been listed a long time, there are obvious deficiencies with the property, etc. I agree that it isn't as easy as they make it sound and I applaud you for getting started! It is a big first step, sorry if these posts have been a little on the negative side, it isn't my intention to discourage the hustle!

If you have a buyer in mind for these properties already you could try earning a "finders fee" rather than a full wholesale but I don't know the legality of that if you aren't a licensed agent. I am not encouraging illegal activity and must stress that you protect yourself by doing the research but it is just another idea to raise the capital.

If I put an offer on a MLS property, my EMD ranges from $100-500. Only one time did I put down $1,000. I don't think there would be any lender out there that would lend you EMD capital.

Thanks @Simon Ghandil . I am unsure why MD agents are requiring $2500 and more. Maybe because the properties have sat so long on the market. I’m clueless. 

Do they know you're wholesaling? Maybe that's why they are "requiring" more. I still go back to everything can be negotiated so I would counter them back and tell them that you are requiring them to lower the EMD on this deal. If you don't have the money and they won't budge on the EMD, you might have to let 2 or 3 of the deals go. 1 deal is better than no deal.

Maybe find a local wholesaler in your area do take over/help you with the deal/s..  Pay them either a large portion or all of the wholesale fee to learn their ways.  

My honest question is...why are you even trying to wholesale MLS listings? Why would someone buy a property from you for 110k when they can see the active listing for 100k?

The niche of a wholesaler is finding off-market deals that no one knows about. Why aren't you door knocking, cold calling, writing letters to properties that look like dumps? 

I'd probably look at a personal loan/signature loan.  Do you have friends or family that could loan the money short term and then you give them interest or part of the profit?

There are also peer to peer lending platforms like Prosper and Lending Club I haven't used them and interest rate will depend on your credit score..but could be an option. 

I know there was one investor on BP that was using Peer to Peer loans to buy properties in cash (low priced properties) and then refinancing later I believe. 

I also wonder about wholesaling off the MLS , any investor will be able to just put the address in Google and in seconds find the listing on the MLS via Trulia,Redfin,Zillow etc.

Best of luck

In our area it is always 3% EMD, and proof of down payments. It looks like no seller will even consider

If you do not have the means should you be business competes with others?

Well, the vast majority of sellers and seller agents will also require a POF or a legit loan approval in order to consider your offer so just having an EM deposit won't get you far. And as others have mentioned, you'd have to find some buyer who doesn't know the property is listed.

@Nillion Lambert The whole concept behind the EMD is that the buyer has some skin in the game.

Turn your attention to sellers who aren't aware of this -- FSBO, etc. -- and you can tie up properties with the cash you have in your pocket.

Thanks for the advice @Christopher Giannino . I have never mentioned anything about wholesaling. My contact with all agents and anyone else is that I am an investor. Unfortunately, I've lost too many deals this way and that has been my reason for researching other avenues of assistance. I guess my search will continue on...

I can see you did not read my post in its entirety @Pratik P. . I never mentioned anything about upselling sir. Just to give you an example, there was a property on the MLS for $125k. I negotiated, got the seller to agree to $90k because it was overpriced, and marketed it for $95-100k. I have also done cold calling, door knocking, letter writing, and other strategies to get off market deals. After receiving few results, I went to this method. This has yielded the best results. So I will continue to do this in order to build capital.

I agree with @Pratik P. But if you are not wholesaling, what are you trying to do? Curious

Thanks for the advice and well wishes @Joseph M. . I've tried it all. I actually abused my credit trying to get business funds the traditional way. Luckily for me, I've had results this way and will continue until I get the results I desire. My buyers are fine with me providing properties significantly lower than what's posted on the MLS. I have to start somewhere until I can do it another way. Isn't the message always to find your niche...

Thanks @Charlie MacPherson and @Tom Gimer . It is refreshing to see someone speak positively on here or offer some encouraging words to assist. I have been basically educating myself and doing the ground work to get started and stay motivated. I appreciate your comments

Originally posted by @Pratik P. :

My honest question is...why are you even trying to wholesale MLS listings? Why would someone buy a property from you for 110k when they can see the active listing for 100k?

The niche of a wholesaler is finding off-market deals that no one knows about. Why aren't you door knocking, cold calling, writing letters to properties that look like dumps? 

I find things on the MLS all the time, the whole deal is that I offer them much less than asking for it, the worst they can say is no. I have picked up MLS properties for 60k under list before and I sold it for about 8k over what I picked it up for. Just because you read a price doesn't mean you're paying that price, everything is negotiable.

I would also say that there is no ONE way to get deals or get them done, the fact that a property was/is listed and you are offering it for much less than asking already shows the value you can add to an investor. I love that many wholesalers out there turn their noses up at something as soon as it is listed, just means more deals for me!

I thought this was a no-brainer. The comments tried to prove me wrong. Finally someone understands. Maybe there is something I can offer the more experienced folks on here. Thanks so much @Zachery Buffin  

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