I'm new to real estate. I quit my job to invest in real estate full time and I'll be honest I'm a little intimidated by the shallow water. I found a property I'm interested in wholesaling. It's a great fixer upper, 3 bed, 2 bath, asking price of $149,900. I reached out to a local real estate agent who claimed to have some personal experience with investing, but she hasn't been able to answer any of my questions so I'm hoping someone on here can give me a shove in the right direction.
Let's say I put a offer on this house. On average, what's an appropriate/ professional amount to put down on a contract? Do I contact my buyers now, or wait till my contract is signed? Is it appropriate to disclaim to your agent/ sellers that your a wholesaler? Is there any additional fees in selling the contract to another buyer? Does anyone have any additional advice for this first time investor? Thanks.
In terms of earnest money, i put down $100 payable to our attorney when i'm dealing directly with an owner. If it's listed on the MLS you likely will have an agent demand more. Since your talking about doing this through an agent let me ask this...Is this property you mention on the MLS? If so, you are probably not going to be able to wholesale it, honestly. I haven't seen it or read the listing etc. In my experience if a property is on the MLS it's already had market exposure at that price point and it's unlikely that you will tie it up and then be able to resell the contract at a profit. I'm not saying it can't be done, just that if your trying to wholesale your first deal and you found it on the MLS, it's unlikely to have enough room for you and a rehabber/landlord to BOTH make money. Maybe you can hit the sellers at just the right time and get them to bend enough. But the sure fire way to get a REAL deal to wholesale is to drive around yourself, find vacant houses, and call write a letter to the owners. VERY LITTLE competition for those deals.
To your other questions...For MLS earnest money, if the deal is REALLY good i'll put down $1,000 paid to MY attorney. Never contact your end buyers until you have the deal tied up. If you put down earnest money with a listing on the MLS i hope you have the ability/intention of actually being able to close the deal, whether your end buyers want it or not (another reason to be darn sure your numbers are good when dealing with listed properties). The only fee there should be when your flipping a contract is the fee you charge your end buyer. RE agent should not get a cut of that at all...