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.