May have first deal but no earnest deposit money!

7 Replies

I’m so new to wholesaling, and I may get my first deal but My lead is asking for 2k earnest deposit! I don’t have that kind of money! What should I do?! Please help

The deposit must stay in title company, a third independent company. If you fail to deliver purchase you can lost your deposit. 

If it's a good enough deal tell the seller that you'll deposit the $2,000 when you have your end buyer in place.  Then tell the end buyer that they need to come up with $2,000 deposit.  

As @Sam Shueh mentioned, it must stay with an independent third party such as a title company, an attorney etc.

Add an inspection contingency and make the earnest money deposit a requirement only upon removal of the contingency.

Amazing! Signing contracts with no money or intention of purchasing! I believe they call that FRAUD.

Maybe you can also explain to the seller that you are not taking the property off of the market or stopping him/her from considering other offers from different  agents or buyers. If you think you'll make a good profit from the deal, maybe ask other wholesalers in your market to provide the 2k and then you guys split the profit. Good luck. 

What bothers me about bigger pockets is a lot of people like myself are starting out in this game to build capital. Everybody is not rich or was born rich so it's amazing @John Thedford if you didn't have any advice you could've just kept it moving.

@Mesha Graham Hi what I would do in your situation is try and find a veteran wholesalers who operates in your area already. If this is actually a deal they should be able to split the deal with you and should have the capital to be able to put up the earnest money for you. 

@Tianna McKeithen I understand what you are saying and there are certainly ways to build capital without any. What @John Thedford was probably referring to is the way some wholesalers do business, if you tell you owner you are going to buy the property and don't have any intention to that is by definition fraud. If however you tell them you are an investor and you are going to find an end buyer within 30 days or whatever amount of time you agree upon that most certainly is not fraud. The problem a lot of people have with wholesalers is they lie and intentionally mislead motivated sellers and actually make there problem worse. Reassure them you will close 100 percent just sign here......

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