Getting funded prior to contract?

4 Replies

Just wondering if it is possible to get funding before having a house under contact?

I have been basically handed a flip deal from a friend that only does buy and hold. He has told me that I need to get my finacing lined up before he will show me the property. It has the potential to give me 50-75k profit. 

Any ideas?

Thanks

Mike

@Michael Whitener what your partner is asking for is commonly called a Proof of Funds (POF) that shows you have the capital or can access the capital to close. This can be in the form of your bank statements and/or a pre-approval letter from a lendner. Without such proof your friend would be wasting time talking to people who have no intention of closing.

Thanks for the reply Crystal.

I understand what and why he is asking for POF. I was wondering how do you get the funds without seeing the property first. I have a potential private money investor, but he wants to see what he is putting his money into. I have also considered hard money and crowdfunding but most want a contract closing date. Kind of a catch 22.

If your friend believes you when you tell him you javeprivate money, fine. If not, your private lender needs to give your omen type of preapproval/commitment letter....max amount of finds,certain LTV, etc.

Thanks Wayne,

I will see if I can get some sort of commitment letter from him. I have gotten a verbal.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.