What to do when you have deals, but no cash? Wholesaling would be an option if I could come up with some earnest money (yes, things are just that tight). Unfortunately, I got mixed up with someone that took money from me and ran, so I am trying to rebuild.
What are my options for some quick cash flow to get the ball rolling again? Bird-dogging, maybe? Are there any lenders that would be willing to roll any up-front costs into the loan? I realize that few lenders are willing to take that kind of risk, but there has to be someone that will bite if the deal is right.
I would listen to Delondon on here. If they want you to pay an insane amount for earnest $, they’re not that motivated. You should be getting these contracts in place for $10. If they ask, tell them that’s what it will cost to get the paperwork going.
Also, what are the numbers for your deals like? Is there enough room for the end buyer for a profit spread. Your deals Should be 70% (or less) x ARV, minus repairs and your fee = your contract
price. How is your marketing going for buyers?
Thanks. I’ll look for Delondon’s posts. Generally, I am being asked for about $1,000 for earnest money. Most of the deals I find are in the 65-70% ARV range. My “marketing” efforts are going pretty well. I find a lot of them by just driving through certain neighborhoods and hunting down the owners. I also find some on the MLS (Yeah, I know lol).
Is this a bank owned property(REO)? Because a $1,000 EMD is too high for a FSBO that sounds more like a bank REO.
If it’s a standard FSBO then run away. I wouldn’t pay that much in EMD to a seller because that means their not motivated enough and you won’t get want you want out of the property as far as price is concerned.
You want to deal with highly motivated sellers who are desperate to sell their home that they don’t care if they get a EMD or not.
IMHO I wouldn’t pay more than $100 on an EMD through a FSBO.
You can tie up properties with $10 earnest money, and you can also make a condition “Earnest Money to be deposited in Escrow at (short sale, REO, etc) approval” to buy some time. Short sales and REO are probably your best option to buy and flip in order to make some money. Also Note Buying (works like short sales). I have a great free report about all the possible ways to make money in real estate with no money or credit at bestrealestateniches.com.
Hello, Mr Investor…Thank you and yes, some of the deals are bank-owned. They are great deals if I could come up with the necessary earnest money. At this point, I need a funding option that requires no up-front costs or a way to generate some quick cash for these and other deals. I will continue to work the FSBO deals, but I just need something to come through sooner rather than later.
Thank you. That is an excellent suggestion. I’ve been looking for private investors, but maybe I’m going about it in the wrong way. I’ve posted on message boards, sent e-mails, made phone calls to some of the “We Buy Houses” folks and contacted the realtors I know. So far, the realtors have been the only promising leads. I will also attend some of the local real estate investor meetings to see what that produces, but those are only held once/month.
Is there anything else I should be doing? I really appreciate the feedback. You guys rock.
If these FSBO sellers are asking for $1,000+ for earnest money I’m concerned these aren’t even truly wholesale-priced deals to begin with. Any seller demanding a big earnest money deposit either is in dire financial straits or simply isn’t motivated. Can you provide us the numbers on a couple of your deals?
When you are ready to get a contract signed don’t make a big deal about the earnest money. And don’t ask them “how much do you need down” or anything along those lines. If YOU make it a big deal so will they. Simply hand them ten bucks and say something like, “I have to give you this just to bind the deal” or whatever. I’d even say, “don’t spend it all in one place” to kinda make it a lighthearted type of thing.
I bet 95% of the experienced investors on here have done deals where they didn’t even give the seller ANY money! A motivated FSBO seller is looking to sell the house…they don’t care about earnest money.
