Real Estate Agent · Baltimore, MD · Member since 2016 · 42 posts · 19 votes
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.
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 have done the following and it has worked every time... make sure your contract is assignable and subject to inspection and set the time period for the inspection at say 15 days. Then stipulate that the EMD is due at the end of the inspection period. This gives you 15 days to find a buyer to assign the contract to. Make sure the buyer knows when and how much EMD is due. It's best to already have buyers you're working with and to know their buying criteria ahead of time.
Without an EMD your contract is arguably unenforceable.
@Tom Gimer I have buyers. That has never been the issue. I will negotiate. I am not trying to get over on anyone. I have always and will continue to conduct honest business. My concern is providing astronomical amounts of money (myself or a buyer) for homes where sellers' agents are requesting certain percentages upfront. It is unnecessary.
@Tom Gimer I have buyers. That has never been the issue. I will negotiate. I am not trying to get over on anyone. I have always and will continue to conduct honest business. My concern is providing astronomical amounts of money (myself or a buyer) for homes where sellers' agents are requesting certain percentages upfront. It is unnecessary.
My reply was to @John Swem.
No EMD = unenforceable contract. Put $1, $10, $100 whatever but put something otherwise you've got no contract. I assume you actually want to tie up a property?
Technically you're right Tom even though it didn't become an issue when I was doing it. As an alternative, you could put a small amount down with the balance of the EMD due at the end of the inspection period, if at that point you decide to proceed to settlement.
Technically you're right Tom even though it didn't become an issue when I was doing it. As an alternative, you could put a small amount down with the balance of the EMD due at the end of the inspection period, if at that point you decide to proceed to settlement.
Good idea. Small EMD to secure contract, increase when contingencies are removed.
@Zachery Buffin@Nillion Lambert I might be wrong about not finding MLS deals in your area but it's extremely difficult in mine...think 19 offers on a fixer within a few hours. As a wholesaler, you would be focusing on the wrong thing if all you went after were MLS deals.
Regardless, borrowing money for EMDs isn't a good idea. What happens when you can't find a buyer and lose the EMD? My suggestion would be to partner with another wholesaler/investor who has the cash for an EMD.
It's a shame that no one will assist with such things as EMD, and Appraisal costs. I have an exit that is approved to do a portfolio purchase on Reo properties. Got approved and the person that was supposed to assist with such things spent the money! Ugh :(
Name Your Return
Me, and an associate of mine have been in real estate for a while. I have years of actual asset management experience on charged off accounts rather credit cards, mobile homes, or homes.What has actually happened in this case is an associate said he had funds to assist us. He then subsequently spent such funds without telling us. In the meantime we setup the ability to purchase a portfolio of reos.
In this instance my company would purchase properties at 50% or less. Then double close to my business associate. The friend was supposed to help with down money and appraisal money for us. Down money on each property can depend. Maybe $100 down, or $1,000 down depending on who we purchase from. Appraisals are usually like $400 a piece.
Here is a sample
Purchase Price $139,000 Zillow Value $266,167 52% Ltv Dbl Close Pur Price $186,000 70% Ltv Potential Profit To Be Made $ 47,900
The business associate (exit strategy) that is buying them has already qualified for the financing to do such. The down fall is it's real estate. As there is a chance that they won't appraise for what their saying the value is. So it can also be considered a gamble to some investors.
However, the properties we've picked should carry the value. My business associate is also prepared to have Sears do the remodels on the homes. Some may consider this a bit more expensive. But his theory is they already have people they have qualified to do such work. So that cut's out a lot of issues for us so we can streamline things.
The good thing is with the double close we don't have to wait for the remodel to be done. We get paid upon closing. This purchase will have 44 properties in the pool. They are all primarily on the east coast in NY, and PA.
Hello Nillion! I know this post is 5 years old, and so by now I'm sure you probably know about this but I just wanted to say Pace Morby found a solution for this. It's called the gator method. (Im in training now to be a gator). It is so interesting reading your post and all of these comments, with people not seeing the value of someone lending EMD money, and they didn't realize how common this is for wholesalers to need to borrow some EMD money. I am so proud of you for your courage and you were inability to allow people to get you down! I'm curious to know how you're doing now? I bet you are probably very successful since you were definitely in with the right mindset and determination!
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,
Hey, I see that this post is a bit old, but I'd be happy to chat with you if this is something you're still in need of!
