Beginner....funds tapped until closing in 2 wks but want to offer on another house?

5 Replies

To begin bare with me if my questions or ideas don't really make sense as I'm still very green in the investment world. I have partnered in a few flips before and have done one flip on my own so far.

 I currently have a house that we have accepted an offer, gone through inspections and apprasials everything is good to go and settlement is set for Aug. 3rd, I also have another property that has gone through the inspection process no appraisal since its a cash offer but no settlement date set yet. 

My question is until the one house closes on the 3rd my funds are tapped, I want to make an offer on a bank owned property but I know it is going to have to be a cash offer. I will be receiving roughly 100k cash back on the 3rd and this property I'm looking at I would need around 35-40k range in order to secure. What options do I have here as I can't show a proof of funds as it is not in my account yet and the house that is closing is not in my name but my partners. I could prob find a private lender to loan me the money for the 3 weeks until we close on the other property but since the funds haven't been in my account for 30 days would that still be considered a cash offer on my part?

Thank you for your help and any suggestions or questions are welcomed 

Do you have any family or friends you can borrow from? Offer them 10-12% and show them you know your stuff and they may become an investor on future deals @Keith White

@Rob Beland

I do have a few options of people I could probably lend from my issue being how does that come into factor when trying to present an all cash offer when in reality I'm getting a short term personal loan? Would I just have them transfer the funds to me then present the offer, or would I present the offer with the proof of funds coming from them? 

If all you need to do is show proof of funds now to lock up the property and will have the funds to close by the required time, you could consider using someone else's POF. I've known many people who pay for a temp proof of funds to get properties under contract and then close with other funds.

@Ivan Oberon 

This is the exact idea I had just to use someone else's POF then set a settlement date for a few days after I close on my other property, my only concern was since the bank is only entertaining cash only offers and my POF would be coming from someone else wouldn't that be considered a personal loan and not cash offer? Or I'm I over thinking it.

Originally posted by @Keith White :

@Ivan Oberon 

This is the exact idea I had just to use someone else's POF then set a settlement date for a few days after I close on my other property, my only concern was since the bank is only entertaining cash only offers and my POF would be coming from someone else wouldn't that be considered a personal loan and not cash offer? Or I'm I over thinking it.

Are you making the offer using an entity Llc, corporation, LP? If you are then make your offer "Entity and or assignee" and submit the proof of funds. Should someone question it then you can always say a new entity will be created and take title with the POF individual Involved. Remember this is just to secure the deal. After you've got it under contract you can choose to close however you'd like providing you close on the agreed to terms and schedule.

If your making the offer in your name use this same method and explanation that the entity just hasn't been formed yet which is very common in real estate investments.

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