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Private Lending & Conventional Mortgage Advice

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Nick Stango
  • Contractor
  • Temecula, CA
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Proof of funds letter

Nick Stango
  • Contractor
  • Temecula, CA
Posted Apr 26 2015, 20:15

My brother is lending me money to purchase my first fix and flip for a pretty hefty interest rate, but my realtor needs a proof of funds letter, he wants me to find a property first and present the deal to him for his approval before he will give any form of proof of funds letter for that property. My realtor wants the letter so she knows I'm a serious cash buyer. How does this usually work? I've heard a few different things. Does anyone have some insight on this topic?  

Account Closed
  • Homeowner
  • Signal Hill, CA
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Account Closed
  • Homeowner
  • Signal Hill, CA
Replied Apr 26 2015, 20:24

A signed, notarized letter (affidavit) from your brother pledging the family loan and attached to it  his VOD (verification of deposit).

VOD is most usually a copy of a recent bank statement.

Proof of Funds nowadays has become a joke as many 'lending partners' are selling them left and right to 'investors'.

Not legal advice, jmo experience.

PS - if you require his approval after you land a deal then you do not have cash available til (contingent!) he approves (which sounds very iffy). 

Good bro, good  luck!

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Nick Stango
  • Contractor
  • Temecula, CA
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Nick Stango
  • Contractor
  • Temecula, CA
Replied Apr 27 2015, 21:03

Anyone else?

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Barbara G.
  • Hartsdale, NY
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Barbara G.
  • Hartsdale, NY
Replied Apr 27 2015, 21:35

Nick shouldn't  you first find a property you are interested in?  Do you need this agent right now?  Are you in a position to buy a multi family and live in it in order to get a 3 1/2% down payment?  How much will your brother lend you?  Have you found a property?  How much interet is your btother charging?

Are you considering a BRRRR  (Buy, Renovate, Rent, Refinance,  Repeat) 


Have you joined a local Real Estate club and a Local real estate meet up group?

BG

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Sergio Garcia
  • Real Estate Broker
  • Deland, FL
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Sergio Garcia
  • Real Estate Broker
  • Deland, FL
Replied Apr 27 2015, 21:37

it's not only for your realtor but for the seller showing you're a serious buyer. 

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Derek W.
  • Investor
  • Kern county Riverside County, CA
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Derek W.
  • Investor
  • Kern county Riverside County, CA
Replied Apr 27 2015, 21:39

this is a bit off topic, but there is this program called photoshop that's really cool. Ok, back to your thread. 

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David Avetisyan
  • Rental Property Investor
  • Glendale, CA
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David Avetisyan
  • Rental Property Investor
  • Glendale, CA
Replied Apr 27 2015, 21:41

Neil did a decent job outlining how it's done.

Given circumstances, I'd simply get your brother to provide you something along the lines of a pre qualification letter.

This should suffice the realtor.  He/she simply wants to make sure you are a serious buyer.

But what is your reason behind using a realtor anyways?