So I have a deal I am getting a contract on a deal that I think has great potential for profit. The only issue is they would like a pretty high earnest money deposit that I do not have. How can I still get this property under contract if I do not have the amount to put in escrow? Is there any way around this? Any advice would be helpful!
I believe you're looking for a transactional lender, but that is the extent of my knowledge about transactional lenders. I'm sure someone will be along shortly to more thoroughly answer your question. I'm hoping the keyword "transactional lender" might pop some keyword alerts.
@Chelsea Malone Don't believe a transactional lender or any lender for that matter will help with earnest money. Unfortunately looks like you have a couple limited options.
1) Go stark raving lunatic and tell them you won't give that much only $x
2) Involve friends or family. Offer a piece of the pie, but mame triple sure you have a contingency to get it back if you can't move and that your family knows full well the risk.
3) Pass it over to another wholesaler for a refferal fee or a small percentage.
@Christopher Goldie has some great ideas... Ditto everything he said, expicaly the triple check part!
I would add this. Get involvement from a local investor. This is why attending and participating in local clubs is so critical. You will find someone to put up the money, and don't be paranoid they wont take your deal. Deal with good people and good stuff happens. They will also be able to do a BETTER job than your family telling you if this is even a "deal" to begin with.
NETWORK NETWORK NETWORK in your local club. Don't be shy about what you need. Have a trusted experienced pro lined up so the next time a deal comes up you can act.... that's not to say its too late this time.
Looks like I learned something new today. So am I understanding that transactional lenders only lend very short term loans for the purchase of a property?
@Jacob Zylstra, that's correct. They lend very short term, like for a day. There are a few that will go out to 90 days but I think that's it. They are used for double closing a property, where you close and your buyer immediately closes behind you.
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