I'm trying to break into a new market, so I don't have any track record there. I've heard that some commercial brokers will ask for a proof of funds before they even show you a deal, if they don't know you.

Are there any compelling reason why I should or should not provide a POF (if requested) as part of my credibility kit? Whenever I provide POF as part of a deal, I always blank out my account number and mailing address.

Thanks!

James

@James Kojo I think depending on your outlook it would change. Some people want privacy. I just want volume so I sacrifice a bit of privacy.

I just entered a new market. I had a good broker...well known. They said lots of buyers out there. I hunted around for a bit and kept hearing brokers talking about buyers kicking tires, I don't kick, I buy. I was making offers but kept getting overlooked. I had cash but no deals. So I asked my old broker that had done a lot of deals with me in another market if they could provide a reference. That didn't get me very far.

Partly my fault. I put a lot of lowball offers out. But that's my thing. I've put out offers for houses and bought them to have them Appraise 100k higher right after closing. So I like my way but it wasn't working in my new market.

I was getting frustrated. Looked at many many houses. I was putting out a lot of offers. At first I sent a POF. I started out to only provide a letter with the amount of the offer. After I was sending multiple offers a day for weeks that got old. So then I printed up a letter from my bank with my total cash on hand. I was thinking that was pretty obnoxious but I said screw it. They will know I have he cash to close. My letter was always a few times what the deals I was offering on. Cash offers, no contingencies.

I was surprised by the response but I'll keep it in mind. Right away I got accepted offers. Closed on one then two them a food. My agent was getting calls asking if I was serious at first. Then I had sellers asking me to raise offers sometimes for minor amounts just so they could sell to me, like 1500 in one case. Basically saying we listed at 70k you offered 41k, then 46k at highest and best. Can you come up to 47,500? I didn't, I came up to 47k but the house appraised at 59k so that was good.

Now at this point I was putting out ridiculous offers. Like houses listed at 180k-I offer 125. 207k- I offer 160, 679k-I offer 525.

Next thing I was closing on houses.

Share it, I don't see an issue

Why would any real estate agent waste time with buyers who couldn't buy? This is why they ask for proof of funds. Good agents qualify the buyers before showing them houses or any other property.

@James Kojo - You should be giving an updated proof of funds with every offer to beat all the other who don't or won't due to "privacy concerns." If you want to buy houses for cash you want to let people know you have the money to do so. As @Account Closed said, once you show them that you are serious, they will come to you. You have to be as transparent as possible and that will help everyone know that you come through and you have the cash to close quickly.

On the agent side, when I am a listing agent and I request a proof of funds for a cash buy and there is any push back, we don't even look at the offer because a cash offer without a POF is not an offer, it's a piece of paper. As a buyer's agent for my investors, I ask them for a proof of funds up front, before I start doing all this work finding foreclosures and off-market opportunities and using my resources to help them. I need to know we are in it together and that when I call with an off-market property in their desired area with a solid ARV, they will be ready with funds to show up and close.

@James Kojo, If you feel uncomfortable providing the Realtor with bank statements to show proof of funds, ask if it would be acceptable for you to provide a pre-approval letter from a lender.  The lender will also ask for your bank statement to prove you have the funds for a down payment and reserves but at least you will know you would qualify for a commercial loan.

James.

Always black out your account number and address. Wouldn't stress about commercial brokers asking you for this information upfront. Unless you're doing super large deals over $5M then sure maybe they'll ask to see some proof of who you are. 

If you don't feel comfortable then don't show them. 

Where are you looking to do deals?

@James Kojo

I am a multifamily broker out of Phoenix. One of the first things I ask any potential buyer, as a way to screen them is there experience and a proof of funds. If someone wants to black out their information for privacy, it wouldn't matter to me - as long as there is available funding for a deal. 

One of the quickest ways to get a bad reputation as a broker is bring an unqualified buyer to the table and waste everybody's time. 

@Matt Roach Thanks for the perspective from a commercial broker's point of view.

I guess the consensus from this thread is one should provide POF if requested.

Do you have any other suggestions for building credibility with a broker if I don't have a MFR track-record? all of my transactions have been SFR.

Thanks!

James

I would not wait to be asked

I would provide proof of funds along with your offer 

@James Kojo

I'd call up a broker in the area that you are interested in and explain what you're looking for. Ask for a recommendation of a local lender that you can then get a prequal letter from and better understand your limitations with financing. I highly recommend using a commercial lender local to that area, as the broker and seller will feel much more comfortable knowing that it has a higher probability to get funded. 

I'd start looking at what is available and try meeting a broker at their office (if possible) to discuss specific properties further. This will start narrowing down your parameters to then setup property tours. I will mention on smaller properties, you may not be able to tour a unit before an LOI - however on most deals over $1-$2m+ it is common occcurance to have a formal property tour.

I would also look into who will manage your property. Making sure your ducks are in order and being responsive is the best way to build credibility with a broker. 

Originally posted by @James Kojo :

@Matt Roach Thanks for the perspective from a commercial broker's point of view.

I guess the consensus from this thread is one should provide POF if requested.

Do you have any other suggestions for building credibility with a broker if I don't have a MFR track-record? all of my transactions have been SFR.

Thanks!

James

 Schedule E with addresses and your SSN blacked out. To show the listing agent and sellers that you have landlord experience (which commercial lenders really care about) and are more likely to be able to get the commercial loan, unless of course you are a cash buyer.