A question about deposit

Hello everyone I am a newbie wholesaler. My question is what type of deposit am I looking at on an assignment of contract or option to assign? I have been told by investors they offer 10-25$ for 60 days, while just today i read a book that said minimum 1000$. I hope someone can shed some light on this for me. Thank you

Howdy Reekay10:

I just did a duplex and a house for $500 each that cost less than $20,000. Thursday I made an offer on a $165,000 commercial building and got it approved with $500 as well. You may try less like $250 or even $100 but less is just foolish. I have heard of $10 but how serious does an offer of ten bucks sound? Not much

Well it is my under my impression that i should be finding the sellers who NEED to sell, so they wouldnt mind if i put 1 dollar on the contract if i was telling them i can buy their house for so and so

Then why does so much of the material on the Internet talk about $10 deposits when doing wholesaling? I’ve seen it in many different places. To me, it sound rediculous and quite frankly would be pretty embarrased to even offer such a low amount, like they wouldn’t take me seriously. But, the scary thing is, if I put $500 or so done and the deal falls through, that’s a lot of money for nothing. Any other thoughts on this??

I believe that the minimum is $10 because legally purchase contracts have to have something in them about “$10 fair and something consideration.” It’s about the “consideration” - something has to be given to bind the contract and I do think that legally it has to be at least $10.
It’s in Bronchick’s Flipping Properties book; I don’t have it in front of me right now.

I don’t think anyone understood your question. I am a wholesaler in Florida.

I always use $500 deposit on contracts unless seller balks. But I never give to seller. I have a $500 check on hand at my title company that they never cash. Legally and ethically they have a deposit if someone calls to ask, but this allows me to write a lot of offers without spending a lot of moeny.

I believe your question was relating to when you sell.

If I have dealt with the investor I am assigning the contract to I just ask them to replace any deposit I may have on file.

If I do not know them, I ask for a deposit equal to whatever I think will keep them from backing out. Anywhere from $1000 to $2500 depending on how long to closing.

Hope this helps

in the state of texas, if you buy an option period, that expense is not refundable if you do not close. it is however possible to convert that amount toward closing. earnest money (deposit) can actually be stated in the contract to be deposited at the title co. in “x” days, therefore your earnest money can actually be deposited at the end of your option period.