Wholesaling question for seasoned investors

15 Replies

I'm new to wholesaling and figured BP is one of the best places to get your questions answered by experienced investor who live and die by real estate. My question for everyone is how do you figure out how much earnest money you put down??!! I'm reading everything from $1 or $10. So what is everyone preferred method...

If you are actually debating between $1 and $10, does it matter? Unless you plan on forfeiting a lot of EMDs because you couldn't "close", even $10 isn't all that much money to lose.

If you are debating between the $1 wholesaler EMD verse the $5-10,000 EMDs that a lot of house buyers put down, then my guess is most wholesalers put down as little as possible, while most sellers want as much as possible. Just remember on the flip side, when you want your wholesale buyer to put down an EMD on your assignment, he too will want to put down a small amount of money, while you will want more. It's all part of the negotiations.

I only use those numbers when the seller wants to wholesale. Meaning I tell the seller that wholesaling is their best option and they agree. In that case putting a deposit makes no sense because everyone knows I am not buying the property.

When I buy the property myself, I can put whatever they want on it (within reason), because my contract protects myself. If I sign a contract I plan on buying the property, so unless there is something wrong with the property itself, I am not worried about losing my deposit. And if there is something wrong with the property, then according to  my escape clause, I can pull out, without losing my deposit.

How many idiots can you find that will take $1 or $10 for that matter? Would you take $10 earnest money on any house you own? 

I'm just starting to gather all information for running my first direct mail campaign. Any advice or knowledge BP family want to pass along to make it a little more successful...

Also I been looking to find some sample of a assignment contract/interest and contract of sale for Pa...

Originally posted by @John Thedford :

How many idiots can you find that will take $1 or $10 for that matter? Would you take $10 earnest money on any house you own? 

 I wouldn’t necessarily call them idiots, just misinformed. I use the edm to negotiate, sell to me and if I walk away you still get $500. 10 day close. I’m not tying people’s property up for 3 months or years for $10

@Jerryll Noorden   who in their right mind would agree to 1 to 10 dollar EM

in my world you would get laughed out of the building and don't come back.

these must be some pretty unsophisticated sellers your dealing with.

all the more reason they get hosed by wholesalers and lose equity..

really sad commentary on the intelligence of many of our citizens.  ( not aiming this at you your a genius LOL) 

If you only plan on $1 - $10 in earnest money, how serious, or confident, in your abilities to find a deal. My minimum EMD is 1% of purchase price, but usually 2%, but I'm actually buying the property and I know I can close the deal so I don't have to worry about losing it.
Originally posted by @Jay Hinrichs :

@Jerryll Noorden  who in their right mind would agree to 1 to 10 dollar EM

in my world you would get laughed out of the building and don't come back.

these must be some pretty unsophisticated sellers your dealing with.

all the more reason they get hosed by wholesalers and lose equity..

really sad commentary on the intelligence of many of our citizens.  ( not aiming this at you your a genius LOL) 

 See it this way.

I tell them that I am not buying the house myself, so it is useless for me to put a deposit down. 

If you trust someone they are legit, and they are actually out there to help you, and you explain to them how it works, they see it makes no sense to put a % down. I would never put a dollar down because that's just insulting no matter what. But anywhere between 20 and 50, just so you ave equitable interest is fine.

Really it is all bout whether they trust you. And people simply trust me. Not just because of my amazingly stunning monkey looks, but I have a ton of amazing reviews on my site, when we meet I am very "real" and likeable, I have my NASA background with videos of me helping paraplegic people walk again. It really all adds up.

People trust me simply because I am 100% flat out bluntfully honest, and when you are,.. people just get a great "gut" feeling about you.

Really not sure what else to say other than for me... it just works. Not always mind you.

Some people are just really suspicious, simply because I am black, and/or think everyone is out the to get them or... who knows. It happens, but most of the time people just end up crying of laughter when they talk t me.

In fact... the last conversation I had, I told them we pay cash.

He said, "ha ha,  good I don't accept anything else". I said "WHAT?! You don't accept my 3 chickens and 5 goats? They are super well fed".

The guy just bursted out  and I had to wait literally for 5 minutes for him to catch his breath. After that, he just trusted me.

Its weird how little things you do show off your character and persona in a big way.

Originally posted by @Jerryll Noorden :
Originally posted by @Jay Hinrichs:

@Jerryll Noorden  who in their right mind would agree to 1 to 10 dollar EM

in my world you would get laughed out of the building and don't come back.

these must be some pretty unsophisticated sellers your dealing with.

all the more reason they get hosed by wholesalers and lose equity..

really sad commentary on the intelligence of many of our citizens.  ( not aiming this at you your a genius LOL) 

 See it this way.

I tell them that I am not buying the house myself, so it is useless for me to put a deposit down. 

If you trust someone they are legit, and they are actually out there to help you, and you explain to them how it works, they see it makes no sense to put a % down. I would never put a dollar down because that's just insulting no matter what. But anywhere between 20 and 50, just so you ave equitable interest is fine.

Really it is all bout whether they trust you. And people simply trust me. Not just because of my amazingly stunning monkey looks, but I have a ton of amazing reviews on my site, when we meet I am very "real" and likeable, I have my NASA background with videos of me helping paraplegic people walk again. It really all adds up.

People trust me simply because I am 100% flat out bluntfully honest, and when you are,.. people just get a great "gut" feeling about you.

Really not sure what else to say other than for me... it just works. Not always mind you.

Some people are just really suspicious, simply because I am black, and/or think everyone is out the to get them or... who knows. It happens, but most of the time people just end up crying of laughter when they talk t me.

In fact... the last conversation I had, I told them we pay cash.

He said, "ha ha,  good I don't accept anything else". I said "WHAT?! You don't accept my 3 chickens and 5 goats? They are super well fed".

The guy just bursted out  and I had to wait literally for 5 minutes for him to catch his breath. After that, he just trusted me.

Its weird how little things you do show off your character and persona in a big way.

 got it like I said I don't care what vocation you choose your smart driven and you will succeed.. some people just are not..

also there is NO equitable interest that is all hog wash .. EM does not give you equitable interest.. I don't know who is teaching that but its BS... equitable interest is when your on title or have Significant money in a deal.

Like one I did were I paid 50k in back taxs and the seller would not follow through.. I sued for performance and got it.. but I still did not have an equitable interest.. you have an actionable interest ..

Originally posted by @Jay Hinrichs :
Originally posted by @Jerryll Noorden:
Originally posted by @Jay Hinrichs:

@Jerryll Noorden  who in their right mind would agree to 1 to 10 dollar EM

in my world you would get laughed out of the building and don't come back.

these must be some pretty unsophisticated sellers your dealing with.

all the more reason they get hosed by wholesalers and lose equity..

really sad commentary on the intelligence of many of our citizens.  ( not aiming this at you your a genius LOL) 

 See it this way.

I tell them that I am not buying the house myself, so it is useless for me to put a deposit down. 

If you trust someone they are legit, and they are actually out there to help you, and you explain to them how it works, they see it makes no sense to put a % down. I would never put a dollar down because that's just insulting no matter what. But anywhere between 20 and 50, just so you ave equitable interest is fine.

Really it is all bout whether they trust you. And people simply trust me. Not just because of my amazingly stunning monkey looks, but I have a ton of amazing reviews on my site, when we meet I am very "real" and likeable, I have my NASA background with videos of me helping paraplegic people walk again. It really all adds up.

People trust me simply because I am 100% flat out bluntfully honest, and when you are,.. people just get a great "gut" feeling about you.

Really not sure what else to say other than for me... it just works. Not always mind you.

Some people are just really suspicious, simply because I am black, and/or think everyone is out the to get them or... who knows. It happens, but most of the time people just end up crying of laughter when they talk t me.

In fact... the last conversation I had, I told them we pay cash.

He said, "ha ha,  good I don't accept anything else". I said "WHAT?! You don't accept my 3 chickens and 5 goats? They are super well fed".

The guy just bursted out  and I had to wait literally for 5 minutes for him to catch his breath. After that, he just trusted me.

Its weird how little things you do show off your character and persona in a big way.

 got it like I said I don't care what vocation you choose your smart driven and you will succeed.. some people just are not..

also there is NO equitable interest that is all hog wash .. EM does not give you equitable interest.. I don't know who is teaching that but its BS... equitable interest is when your on title or have Significant money in a deal.

Like one I did were I paid 50 in back taxs and the seller would not follow through.. I sued for performance and got it.. but I still did not have an equitable interest.. you have an actionable interest ..

 Yeah.. maybe it is something I burned into my head from my newbie days listening to the gurus.

I have no idea then :)

Originally posted by @Jorge De Jesus :
Originally posted by @John Thedford:

How many idiots can you find that will take $1 or $10 for that matter? Would you take $10 earnest money on any house you own? 

 I wouldn’t necessarily call them idiots, just misinformed. I use the edm to negotiate, sell to me and if I walk away you still get $500. 10 day close. I’m not tying people’s property up for 3 months or years for $10

 How many unlicensed brokers would accept $10 on THEIR house? LOL

Originally posted by @John Thedford :
Originally posted by @Jorge De Jesus:
Originally posted by @John Thedford:

How many idiots can you find that will take $1 or $10 for that matter? Would you take $10 earnest money on any house you own? 

 I wouldn’t necessarily call them idiots, just misinformed. I use the edm to negotiate, sell to me and if I walk away you still get $500. 10 day close. I’m not tying people’s property up for 3 months or years for $10

 How many unlicensed brokers would accept $10 on THEIR house? LOL

 Not sure if you are referring to a broker’s unlicensed capital partner or someone like myself who procures a transaction. Either one of us would know enough... most people are not as knowledgeable as they believe yet under the right circumstances I’ll tie up my property for $1 emd if you are closing in 72 hours

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