Hi guys! Beginner in wholesaling looking for help.
Wondering if you need to obtain a pre approval of some sort or any type of financing at all to put a property under contract with a seller when you intend to wholesale it!
This also includes things like would you put down a earnest money deposit to wholesale?
Bonus question: Is there a set amount of days you have to sell the property to a buyer when you have the property under contract? If so, what happens if you exceed that number of days? Are you stuck with the property? What ways can you use to exit out of the contract?
Yes you definitely need an approval for financing letter. No ones going to commitment lending money without a vetting process. But as a wholesaler what would you need financing for?
@Joe Stout Yes, agree with Ray's comment above, if you're wholesaling it you shouldn't need any financing.
The EM deposit depends on your area, I've seen 1% of the purchase price customary ($2500 on a $250k house). If you don't perform per the contract, generally you would lose that EM deposit.
No you don't need a pre approval, you're looking for sellers who don't have the knowledge to know what a pre approval is. If they know what a pre approval is then they're probably too knowledgeable about their house value to be a good target for you.
Yes you should put down EMD.
The contract you use is going to dictate the answer to the rest of your questions. It's good you're already looking for ways to weasel out of a contract, you're going to fit right in as a wholesaler.
@Ray Danishyar So you would need a pre-approval letterhead from a bank? I wouldn't need financing, thought it may be required.
@Nick C. What different types of contracts are there to use? How do I access them? Which one is the correct one to use?
And yes but I need to know specifically how to weasel out of them... LOL
@Joe Stout whoever your lender is yes if you are buying the property but not if you are wholesaling. With wholesaling you would put ernest money down.