I love posts by people looking for seedy ways to look credible.
Seedy?? Honestly I don't get a lot of the commenters on this post. It's like y'all are all newer newbies than Susan says she is. No agent that you do not already have a great relationship with AND who understands the nature of REI and flipping (RARE) is going to send your offer to the owner without a POF letter. None. Nadda. Zip. Zero. Go ahead and pick any house off of Redfin which has a "start an offer" option. You will get a message back from the agent saying they need a POF letter before submitting the offer to the owner. You can use any real estate site but redfin is faster.
The reality is that it's based on a contingency. The investor looks at property , makes an offer contingent upon approval and inspection. Maybe the investor just got burned on a house with a faulty foundation and does not want to mess with any house with foundation problems. They can make the offer - contingent upon inspection. Investor gets contractor to inspect and give a scope and a price for rehab. The rehab costs are going to exceed the avg list price for a comparable home in the area so guess what? NO DEAL. Nevermind my offer. Forget it. Walk away. Oh and it has a cracked slab? RUN! A HML and a PML will not lend money on a property that, once inspected and scope price given, will not turn at least X% profit because they are not in the business of lending so they can lose money on bad deals.
All POF letters that are not your own money are CONTINGENT. That does not mean they are seedy or fraudulent. It means they are prudent.
HML's and some PML's also require an appraisal and if the house does not appraise for the amount requested, the borrower either has to come up with the difference or it's not something the lender will fund. Also, this is because they are prudent, not seedy. So if a deal falls through after a POF has been provided, it's because it wasn't a good deal. Y'all are funny to act like the seller and selling agent are not hiding anything, because if there are serious problems, they more than likely are hiding it in non-disclosure and claiming ignorance.
On top of that, even seasoned investors do not always use their own money to fund a deal. In fact they rarely do because they typically have about 7 to 10 deals going at the same time and that, my friends, is a lot of Snapple. I am sorry for Susan that she received a lot of unprofessional, bad advice and no doubt lost out on making money off her deal.
Real Estate Agent · Las Vegas, NV · Member since 2015 · 34 posts · 7 votes
11y
I agree the POF letter to everyone mentality that many lenders have doesn't make sense. It definitely hurts their credibility when contracts continuously fall through which were accepted from terms they gave without any conditions or requirements. But then again lending is always contingent; so, they lend to everyone under the presupposition that the property under contract meets their lending requirements. What a frustration for everyone involved in the real estate business.
To whom may to reading this e-mail. I need to get a proof of funds letter. How do i get one and doing anyone know any website that may be the right one to get the letter. Thanks
Good one, Eric! You sucked @Tom S. and @Jon Holdman in to thinking you were serious! Cheers...
Investor · Miami, FL · Member since 2014 · 82 posts · 19 votes
10y
if you are dealing with a reltor that don't want to work with you with out a POF...find a realtor who will work with you..be transparent..let them know what you are doing..try using one of those free POF online...they work...
Real Estate Investor · Woodstock, GA · Member since 2015 · 7 posts · 13 votes
10y
Someone just brought this thread to my attention again and I would like to answer to the idea of POF's via online outlets that spit them out without really reviewing the deal. I think most agents or sellers who ask for a POF letter already know the companies that provide these type of POF letters which is exactly why I don't use them. I use letters from real people/lenders that I know or companies that I have dealt with, who will at least take a look at the subject property and be willing to vouch for me should the seller call them. But I still do not feel that POF letters from credible lenders is at all a seedy practice. It's how you get your foot in the door.
Investor · Fremont, CA · Member since 2010 · 22 posts · 5 votes
9y
Gotta' comment. I was 18 years old when I learned that lesson, and have never forgotten to not pre-suppose the buyer.
Working as a "liner" on a major dealership used car lot. A fellow arrived in a Taxi. He walked through at least 3 more seasoned salesmen, but I reasoned the Taxi was the clue that he was going to drive off the lot. And no trade.
End point; he was a merchant seaman, just got back to the U S of A with cash in his jeans. I made a fat commission on that, one of my first deals.
Investor · Fremont, CA · Member since 2010 · 22 posts · 5 votes
8y
First...make your list of possible partners who have funds/credit. Friends, family,Church, Doctors, people you network with. Follow Brandon Turner's book "Little or No Money"; Matt Faircloth "How to false private money" and his suggestion of "Making a one page business plan".
These guys, major mentors here on BP give all you need showing you how to go from 0-millions but you must WORK, especially if you have little or no funds.
As for agents with jose in the air...next, is the operative word. Keep your nose here in BP and WORK and pray.
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
7y
"Is it not a disservice to the seller when the agent refuses to show the property? With or without proof of funds every looker/caller is a potential buyer and could be the one."
No, it depends on the seller and their motivations. I have had many sellers not want a bunch of people going through their house. Some very well off professions where they have no interest in their clients later talking to them about how the bathroom was just too small for them. Maybe they don't want to have the kids and dogs packed up every time a neighbor wants to go in and get decorating ideas.
The reasons are as varied as sellers are. Blanket statements like report all agents who follow their clients wishes keep admins and boards nice and busy.