What Would YOU DO had POF but no DOWN ?

Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes

If you had POF for up to $500k but NO down payment funding from any sources = IRA, Family, Bank Loans, Credit or Income . . .

What would YOU DO to purchase a BUY & HOLD commercial 10 - 12 unit investment property for CASH FLOW with a Min. Cap Rate of 8%, ROI > 70% and vacancy rate < 5% annually.

Thank you for any help BP Friends!

2 Reply

181 views

Most Popular Reply

Wayne Brooks

Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes

10y

I do a reality check on whether that $500k is Really available to me under my current circumstances. Also, "if you had a POF for $500k..." means You have $500k, but I'm guessing in this case someone is promising to fund you, that actually has the $500k, so you Really have a supposed "preapproval" for $500k, not a POF.

8 Reply

See this reply in the discussion

91 Replies

Jump to latestLatest

Sort by

Simon Shih
Investor · Houston, TX · Member since 2012 · 354 posts · 186 votes
10y
@James Wise @Roy N.
I stand corrected.
2 Reply
Hattie Dizmond
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
10y
I suggest you read basically every blog post by Michael Blank.
0 Reply
Christopher Brainard
Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
10y
Originally posted by @Monique Rene Coates:

@Simon Shih, @Bob Collett : Thank you for your input and advice, I appreciate it. Just to clarify for everyone, the $500k POF / LTV monies I have access to were purchased thru a seminar last summer.
The funding is private and can be used for various levels of investing, from assignment of contracts, flips up to and including commercial / multifamily RE deals, however we must bring the down payment into the deal in order to access the funding. It was advertised as 100% funding for real estate deals. The only way to cancel after paying was to show them you made at least 3 offers. I had no down payment money and still don't. However if I meet someone who would like to partner, I have this funding available.
I agree with Jay and James. It sounds like the POF isn't worth the paper it is printed on and explains the tone of the rest of the thread. A POF letter is supposed to be a letter from a lender or bank showing you have funds available for a transaction. That doesn't sound like the case here.
-Christopher
0 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
10y
@Monique Rene Coates, do the initials CD mean anything in regards to your promised "100% funding for real estate deals"?
Whoever, "100% funding" means THEY provide any down payment!
Lol! (Sorry, I just find that too funny)...
0 Reply
Leon D.
Investor · Chicago, IL · Member since 2012 · 190 posts · 85 votes
10y
A prof of funds letter (POF) is exactly that: a document that proves you have the funds. Actual cash. Not a commitment, not a promise, not an approval, not a wish. If you don't have the $500k in cash or cash equivalents, then you have a pre-approval or loan commitment, either of which can be withdrawn if the lender so deigns.
The very definition of proof requires that something actually does exist, not that it probably 99.99% will.
0 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
@Hattie Dizmond, @Leon D., @Christopher Brainard, @Brent Coombs - Here you go! Please see what was sold below. You can read it for yourself. I took out the name of the private lending / funding group name website. The initials of the program /seminar that sold it is "SP."
The need for the down payment was well buried in a disclaimer and wasn't discovered until WELL after purchase and their 2-day Boston seminar with about 50 - 60 people in attendance.
0 Reply
Hattie Dizmond
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
10y
@Monique Rene Coates
I wasn't even commenting on your POF or lack of a down payment. By recommending you read Michael Blank's blog posts I was hoping to give you a different perspective on how you can possibly syndicate your way into MFR investments.
0 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
@Hattie Dizmond - I'm sorry Hattie. Please send me a link to Michael Blank's blog information.
0 Reply
Christopher Brainard
Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
10y
Originally posted by @Monique Rene Coates:

@Hattie Dizmond, @Leon D., @Christopher Brainard, @Brent Coombs - Here you go! Please see what was sold below. You can read it for yourself. I took out the name of the private lending / funding group name website. The initials of the program /seminar that sold it is "SP."
The need for the down payment was well buried in a disclaimer and wasn't discovered until WELL after purchase and their 2-day Boston seminar with about 50 - 60 people in attendance.
This isnt a POF letter, just an advertisement for a company, which sells seminars.
-Christopher
0 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
Originally posted by @Christopher Brainard:

Originally posted by @Monique Rene Coates:
@Hattie Dizmond, @Leon D., @Christopher Brainard, @Brent Coombs - Here you go! Please see what was sold below. You can read it for yourself. I took out the name of the private lending / funding group name website. The initials of the program /seminar that sold it is "SP."
The need for the down payment was well buried in a disclaimer and wasn't discovered until WELL after purchase and their 2-day Boston seminar with about 50 - 60 people in attendance.
This isnt a POF letter, just an advertisement for a company, which sells seminars.
-Christopher
@Christopher Brainard: No, this document itself is not the POF. Recipients only received this piece of paper post-payment at the RE seminar in order to help them understand, to some extent, what they were purchasing. POF comes once your deal is submitted to the private lenders for review.
0 Reply
Hattie Dizmond
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
10y
Search on Michael Blank. Click on Bigger Pocket's Blogs
0 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
Originally posted by @Hattie Dizmond:

Search on Michael Blank. Click on Bigger Pocket's Blogs
Ok thanks @Hattie Dizmond
0 Reply
Christopher Brainard
Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
10y
Originally posted by @Monique Rene Coates:

Originally posted by @Christopher Brainard:
Originally posted by @Monique Rene Coates:

@Hattie Dizmond, @Leon D., @Christopher Brainard, @Brent Coombs - Here you go! Please see what was sold below. You can read it for yourself. I took out the name of the private lending / funding group name website. The initials of the program /seminar that sold it is "SP."
The need for the down payment was well buried in a disclaimer and wasn't discovered until WELL after purchase and their 2-day Boston seminar with about 50 - 60 people in attendance.
This isnt a POF letter, just an advertisement for a company, which sells seminars.
-Christopher
Sorry, I was confused. I thought you already secured POF. The financing offered above is terrible and I particularly like their "reasonable" 3% per month on the flip funding. Doesn't that violate usury laws? Either way, I think you need to reconsider what you may have planned and look for a more viable strategy.
-Christopher
0 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
Originally posted by @Christopher Brainard:
Originally posted by @Monique Rene Coates:

Originally posted by @Christopher Brainard:
Originally posted by @Monique Rene Coates:

@Hattie Dizmond, @Leon D., @Christopher Brainard, @Brent Coombs - Here you go! Please see what was sold below. You can read it for yourself. I took out the name of the private lending / funding group name website. The initials of the program /seminar that sold it is "SP."
The need for the down payment was well buried in a disclaimer and wasn't discovered until WELL after purchase and their 2-day Boston seminar with about 50 - 60 people in attendance.
This isnt a POF letter, just an advertisement for a company, which sells seminars.
-Christopher
Sorry, I was confused. I thought you already secured POF. The financing offered above is terrible and I particularly like their "reasonable" 3% per month on the flip funding. Doesn't that violate usury laws? Either way, I think you need to reconsider what you may have planned and look for a more viable strategy.
-Christopher
@Christopher Brainard: This private funding I purchased "INTO" is supposed to be guaranteed, as long as we bring the down payment to the deal. So I am ASSUMING that POF is given upon our proof of having down payment funds, regardless of deal type. Like I said Chris, I have not closed a deal using these private funds yet.
0 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
Originally posted by @Christopher Brainard:

Originally posted by @Monique Rene Coates:
Originally posted by @Christopher Brainard:

Originally posted by @Monique Rene Coates:
@Hattie Dizmond, @Leon D., @Christopher Brainard, @Brent Coombs - Here you go! Please see what was sold below. You can read it for yourself. I took out the name of the private lending / funding group name website. The initials of the program /seminar that sold it is "SP."
The need for the down payment was well buried in a disclaimer and wasn't discovered until WELL after purchase and their 2-day Boston seminar with about 50 - 60 people in attendance.
This isnt a POF letter, just an advertisement for a company, which sells seminars.
-Christopher
Sorry, I was confused. I thought you already secured POF. The financing offered above is terrible and I particularly like their "reasonable" 3% per month on the flip funding. Doesn't that violate usury laws? Either way, I think you need to reconsider what you may have planned and look for a more viable strategy.
-Christopher
MANY PEOPLE purchased this deal in New England. Wasn't just me . . .
0 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
Originally posted by @Hattie Dizmond:

I suggest you read basically every blog post by Michael Blank.
@Hattie Dizmond: I started reading Michael Blanks and I already like him a lot. Very uplifting, thank you again for the recommendation!
0 Reply
Leon D.
Investor · Chicago, IL · Member since 2012 · 190 posts · 85 votes
10y
@Monique Rene Coates, anything this "company" is promising you is not a POF. A POF is a (semi) official document from a bank or other financial institution that verifies the amount of money you have available (either yours personally or under your direct control) that is not otherwise obligated to something else.
Anything else is variously just a promise, a lie, or a scam.
1 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
Originally posted by @Leon D.:

@Monique Rene Coates, anything this "company" is promising you is not a POF. A POF is a (semi) official document from a bank or other financial institution that verifies the amount of money you have available (either yours personally or under your direct control) that is not otherwise obligated to something else.
Anything else is variously just a promise, a lie, or a scam.
@Leon D. The private funding I purchased "INTO" is supposed to be guaranteed, as long as we bring the down payment to the deal. So I am ASSUMING that POF is given upon our proof of having down payment funds, regardless of deal type. Like I said to Chris, I have not closed a deal using these private funds yet, so not sure when POF is given to us to present to a seller.
0 Reply
Monique Rene Coates
OP
Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
10y
POF does NOT have to be bank funding
0 Reply
Marshall Downs
Investor · Benton Harbor, MI · Member since 2013 · 257 posts · 140 votes
10y
Hello Monique,
You'very taken a lot of constructive criticism here for a few reasons, not to harp on them but only to make sure you have a grasp on the challenge your situation presents.
In reality, there are great lenders to work with who would potentially extend $500k to you, but that would most likely happen only if you had significant experience and had structured a knock it out of the park deal or if you had worked with them on smaller deals growing to that value over time. Truth is, most people who attend seminars of the sort you were at do not have the track record to warrant anything like that. So, the requirements to get into a loan like that are typically so tight that no one qualifies. Additionally, the $500k loan appears to be transactional so if you were to find a deal to wholesale that would work, but again the criteria is often intentionally absurd.
My 2 cents is if you are starting out, start small and close to home so you can actually put eyes on your deals as opposed to remotely trying to identify the project, find funding, arrange repairs (if necessary), manage folks and sell the deal afterward. Save those for your future investor self who has cut their teeth and has a better understanding of the inspection and outs of the industry.
Best regards,
Marshall Downs
2 Reply
Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
@Monique Rene Coates This is the last time I'll try this. You seem like a nice,well meaning, trusting individual.
POF equals Proof Of Funds. Funds equals cash in your name, deposited in a financial institution...not financing of any kind provided by anyone else. That would be a preapproval, and preapprovals provided by theses types of guys are ignored as useless trash, by everyone.
Their "Guarantee" is absolutely useless.
The qualifications to get one of these loans, which are buried somewhere, will be something that you will not meet, and you will not get the funding.
The terms of their supposed are ridiculous:
Rehab loan at 50-80% of purchase price only, excluding rehab costs, as opposed to typical 80% of purchase and rehab costs. 3% interest per month! for 3 months, and rental will have additional fees (you won't buy, rehab, market, get under contract, and close within 90 days).
These guys make their money selling you the seminar, not lending the money.
THIS SOURCE OF FUNDING DOES NOT EXIST FOR YOU. PLEASE DON't BE COUNTING ON IT.
3 Reply
Leon D.
Investor · Chicago, IL · Member since 2012 · 190 posts · 85 votes
10y
@Monique Rene Coates You are correct, it doesn't have to be from a bank, It could be from Vanguard or Fidelity or some other financial institution, too. The point is, it has to actually be your money. In your possession. Under your control.
Wikipedia: "A proof of funds (POF) is a document or bank statement proving that a person has the financial ability to perform a transaction."
Investopedia: "A document that demonstrates that a person has the ability and funds available to use for a transaction. It usually comes in the form of a bank, security or custody statement."
InvestorWords: "Documentation issued by a qualified financial institution declaring that the accountholder has sufficient funds to be used on payment for a large purchase. It should be noted that a proof of funds is a popular vehicle for fraud, used by con artists and in real estate fraud."
eHow: "[A proof of funds letter is] a memorandum issued by your financial institution that confirms the total amount of money that is currently deposited in your bank accounts."
I'm sorry, but you do not have a POF. A POF does not have any contingencies or criteria. You bought an empty promise. You've been scammed. They took your money in exchange for some sort of potential letter of credit, contingent on you and the deal meeting a list of vague criteria.
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
10y
You can lead a horse to water but you can't make him drink it
I suggest all others reading this thread stay far far away from the group promoting that seminar. Good luck to the O.P. hope it works out.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Hattie Dizmond I just got a POF from my bank yesterday for a deal ... I will e mail it to you and if you can upload it and post it on this thread for this lady to see and maybe others to see what a real POF is... this may alleviate any confusion of what sellers are looking for.
check you in box... I would do it myself but I don't know how to upload anything to a website I only know how to scan and email..
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Charles Worth
Investor · New York City, NY · Member since 2015 · 808 posts · 417 votes
10y
@Monique Rene Coates
A POF is just the start of the deal, in order to close that deal you need to turn that POF into real cash. The worst case is you find out the POF is worth about as much as the paper it is written on. I have had numerous entities issue me a POF on their "commitment" and even some of the real lenders who did this failed to perform in time so I had to close in cash. From your perspective it sounds like this firm that gave you the POF is a bunch of hot air but in any case any POF is really just a maybe, you can't do a RE deal without spending some money (DD fees, lawyers fees, etc.) and you would not want to get deep into the deal only to find out you just spent a few $K you can't afford to lose.
That does not mean all is lost. If you find a good deal someone will take it off your hands, you may not end up on the beach never working again like a lot of gurus promise but you will learn a lot and maybe earn some money. You will also learn what a good deal is before you put something at risk (your money, the banks money or your family's money).
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.