OfflineHey guys,
Sean here again, with another question. I've been working my butt off lately to close my first deal. Without going in to great detail, Ive been fully self-employed getting this REI company off the ground, among another couple businesses, but this is the one I am focused on the most. Seeing as it will be my foundation company giving support to any other business I may start in the future.
With that being said, I have been hitting it hard lately. Ive got most of my ducks in a row. Ive got my RE Agent, my RE attorney, my buyers list stacked with about 10 solid investors and the sellers list is growing. Ive got a few properties of interest that I would like to lock up in contract in the next couple days. Ive been talking to my agent about doing so and Ive come against another hurdle. To my knowledge its not a very tall hurdle but one all the same. Its about the earnest money...
Now, I like to do my research on here looking to find the answers to my questions before I ask them. I've found a couple good tips which I may use but still quite unsure. One of which I liked was the promissory note. So my problem is, like Ive seen mentioned before, if Im submitting multiple offers and have no capital to put up for earnest money myself, how can I get around this if the seller really needs this information?
My biggest concern is what my agent is telling me. He's saying that this is important to come up with because it shows how serious you are on the property and putting it up makes you look responsible enough. And not doing it might hurt my chances of getting it and might make me look bad in the future.....Please help guys!!! And the quicker the better. Like I said, Im trying to move on this, this week! Im tired of waiting around with all this knowledge Ive learned the last couple years and doing nothing about it. Its enough to drive a sane man crazy! Ive got the momentum built up. Its time to get this done!!!! Thank you so much guys!!!
Sean Bearden
Shui the Builder
Sean Bearden
Shui the Builder
Make every offer with a good POF letter and a COPY of your earnest money check.
The earnest money is not required unless the offer is accepted. So don't let no earnest money stop you from making offers.
Now when the offer is accepted then it is scramble time!! You usually have 48 hours after the signed accepted contract is returned to you to supply the real
earnest money.
On my first deal I did not have buyers lined up in advance so I actually took an advance on my credit card to cover my earnest money check! However, what you need to do to make this work (in the real world) with no money out of your pocket is have a buyer in place that you can flip your deal to within the 48 hours and have their money cover your check.
Your agent is correct about making a strong offer. NO or very low earnest WILL hurt your chances of getting an accepted offer. You are making a cash offer and you have no earnest money? You have to come up with some creative promissory note strategy to cover earnest when you are making a cash offer? These strategies may work once in a while but in my opinion are no way to develop a solid, consistent way of getting offers accepted. I think every agent worth his salt or decent agency KNOWS when they are dealing with a no money rookie investor trying to lock up a property while they search for a buyer. They rightfully want to avoid this. You must come across as a professional that will close!!
Now when dealing directly with a motivated homeowner (no agent involved) you can put up $10 as earnest and use most any strategy to close as long as you produce and don't waste the homeowners time.
These are all my opinions of course!
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
What I usually do is give them a check.You have 5-10 days for inspection,depends on how long you want it,and with in that time you should have a buyer/with earnest money.Also you can put in contract that you will deposit earnest money after inspection,if you want it.
Hope this helps!
Many Blessings.
Seriously thanks for the help guys! This is kind of what I had assumed to be in the first place but once again, fear gets in the way. That was it! That was all I needed to get these first deals, thats right I said deals, plural, to get moving forward. I guarantee this, this is not the last you will be hearing about me and these deals. Thanks again for the help guys! I really appreciate it. To be continued....
Sean Bearden
Shui the Builder
there's not much to add from Michael's post- he pretty much covered it all, but what I did with my first property, I borrowed money from my brother for the EM, then paid him back (with some interest) when the deal closed. Needless to say, since then I can always borrow money from him
Looking forward to hearing about your deals!
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
This is exactly what I needed to know as well. I'm going to try and do this too. I have lousy credit and so does my hubby. So this is going to work for us. I think you guys on this site are wonderful and full of some great advice for us beginners! I appreciate every post on here! Thank you!
Angie
My agent is telling me that the trend is leaning towards electronic Ernst money where they are withdrawing it within 3 days of the bid being accepted. Has anyone else come across this? I have 15 bids the agent has ready to submit and I'm good for 3 or 4 like that. Will have problems after that. Any thoughts on this would be great as I am just starting out in the program.
Thanks
jrluff
My REA took my original check for $500. She is using it to submit copies for other offers, but should she have given me the original back until a deal is accepted?
Thanks!
Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
Do you have enough if all your offers are accepted? It is probably okay anyway, as it will likely not happen, but if it does, you have an exit from one if needed. I think I wouldn't worry about her having the $500, but maybe next time it could just be a copy.
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
my agent kept a check of mine for months, and when a deal got accepted, she just deposited that same check we had used for the all previous offers...
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...