To all:
Is it necessary to have a down payment when making offers? I see articles saying you should be making 1,2 … 25 offers a week! However, don’t you need to put down a deposit?
If you make offers on HUD, bank owned you will need to show EM. Once they accept your offer do you have the money to closed?
Great point. If I made 25 offers and was fortunate get 2-3 accepted, I would need to wholesale them or be able to close on them.
What are the ramificiations if I have an offer accepted but could not take further action?
If you make offers with no funds to back it up and just walk away the word will get out and no one will trust you until they see your cash.
Maybe you can make an arrangement with your end buyer where if your offer is accepted, they can provide the EMD. Maybe you can form an LLC with your end buyer, and make the offers in the name of the LLC. Then if the offer gets accepted, the buyer provides the EMD. This way your buyer can also provide you with proof of funds. Then when you close on the property, you assign it by selling your buyer your interest in the LLC (since most banks won’t let you assign the sales contract).
If your 1st buyer is not interested in the property, maybe they will still help with the contract while you find a different buyer that you can bring into the LLC by selling your first buyer’s interest in LLC to the new buyer.
I have never tried any of this, but it sounds like it might work.