I am working with a client who is looking to flip a property and will be using a hard money lender. I am writing up the offer but I didn't know if it would be considered a "cash" offer or financing. If they ask for proof of funds, how do I show that?

Thanks!

@Chris Laino . This is financing because it has to be paid back. Get a proof of funds letter

@Caleb Heimsoth thanks for the reply Caleb. Get a proof of funds letter from the lender or my client?

Originally posted by @Chris Laino :

@Caleb Heimsoth thanks for the reply Caleb. Get a proof of funds letter from the lender or my client?

Tell your client to get one from

Their lender.   

@Chris Laino it's definitely an offer with a financing contingency. His HML should be able to provide proof of funds.

@Dan Barli thank you!!

Most of the HML letters I have written from the lender will state that this preapproval may be used 'same as cash'. That's where the position of the buyer is much stronger than a traditional lender. Especially if they have had a preexisting relationship from that buyer.

Because the HML typically can send a POF (proof of funds) with the available cash to purchase the home, you can put your offer in as a "cash offer". But ultimately it is based on financing contingency. I've used Hard Money on all of my deals, and put "cash" on every one of my offers. I Just let the necessary parties know that I'm using Hard Money. This has been my experience.

@Chris Laino My agent said he sends a copy of my bank statement with my cash offers. Wouldn't you need proof of funds to send a cash offer? Surely the other realtor won't just take your word for it right? Honest question for the realtors reading this.

In Florida you can use financing WITHOUT a financing contingency on most contracts that I've read.  NJ may be different.  I get calls almost every day from sellers questioning "cash" contracts on this topic to verify proof of funds.  The important part is probably to disclose your clients are using private financing, and that the lender is okay with the condition (of the asset) IF they are.  

@Lien Vuong 's response is spot on.