Questions about wholesaling

[Tammy Fleming]

Hello Everyone

I have an opportunity to purchase a home through a wholesaler. I have never done it before and i would be happy with any guidance. There is no utilities but she wants a $5000 non refundable earnest money and a 3 day option. I ran the numbers and it looks like a good deal but i wouldnt have an opportunity to check things out. Help 

[Michele Showalter]

Quote from @Cornelius Garland:

Quote from @Tammy Fleming:

Hello Everyone

I have an opportunity to purchase a home through a wholesaler. I have never done it before and i would be happy with any guidance. There is no utilities but she wants a $5000 non refundable earnest money and a 3 day option. I ran the numbers and it looks like a good deal but i wouldnt have an opportunity to check things out. Help 

Greetings Tammy! My advice, coming from someone who primarily wholesales and purchases land from wholesalers, I would ask them for a longer due diligence period; 14 days is the standard. The earnest money should be due after your inspection. This wholesaler sounds like a novice. Usually, I only collect $2k - $3k for earnest money unless my assignment fee is above average or the house's ARV is $500k+

Sounds like they're trying to pressure you into signing and purchasing the property quickly, which I take as a red flag. I'd also ask them if they are the actual contract owner - meaning, are they direct to seller? They should not be "daisy chaining" the deal and pushing someone else's deal unless they disclosed this to you. I would Google the property to see if it comes up in a Facebook marketplace or group post just to ensure you're talking to the actual contract holder.

There are a lot of novice wholesalers out there, some with malicious intent but many are cutting corners looking for a quick buck.

Hello Tammy! @Cornelius Garland was right on. I'm an experienced wholesaler along with investing for years now. I would ask for a longer due diligence period and get your contractors out to the property. I've never paid over $1,000 for EMD. Some sellers ask for 10% of the price and make sure it's refundable to you. Hold escrow in a title office where you are comfortable.
My thought process states wholesaler is a novice and isn’t a direct to seller contract. If you need any help, please let me know!