Beginner In Need Of Help
I'm finally ready to start investing and I want to start off by wholesaling. However, I have three questions.
How do you decide how much to offer as earnest money?
Should I only deal with people who have a good amount of equity? In other words, do I have to make sure that the loan is less the value of the house?
Before I make an offer, do I have to inspect the property, get repair cost and comps as I would if I were going to rehab the property?
Earnest money with is $10 to secure the contract...if a cash buy its the amount im offering, this gets the attention Im seeking and lets them know Im serious!
I have bought homes with 100% financing on them and 6 months old...this depends on the form of aquisition you are using..in this case I used a lease purchase..
inspection ... I walk the property to start and see what I can see...... If I see questionable issues I call a contractor whom Ive work with a few times and he gives me a bid on everything needing to be done....
If its an issue of a roof, get 3 estimates, they should be free.. i dont pay for est.- if they want my biz-free est.-fair price-good work....
and of course you can always make your offer subject to property inspection by a pro, with a dollar cap on the back out for you...I dont do this.....I lower the offer in conjunction with the value of repairs needed....
In my case, I will be flipping my first few deals and plan to use buyer financing to structure my deals.
I plan to put a clause in the contract similar to "...subject to my parnters approal" or something along these lines to give myself at least 30 days to find a buyer.
In these situtations, how much should I offer as earnest money when I'm working with indiviudals and REO owned property.
In my offers I try to make SOMETHING strong. If it not the price, it is the earnest money. Since you can get it all back anyway the amount means nothing, really, but a seller may be more impressed with a big number.
I NEVER give an earnest money with the offer. My offer always says x dollars 72 hours after acceptance of contract and I always specify the escrow holder. I do this because it eliminates having to sign releases to get earnest money back when there is no deal. My way, I only put the money in when there is an executed contract.
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