Proof of Funds Letter for Flips?

[Joshua McCarthy]

Hey all, 

I'm currently looking at a potential flip in my hometown of Batavia, NY and have come to an agreed upon price. The seller is asking for POF with the written offer. My plan was to use private funding or HML but I'm open to a JV with a partner that can finance the project.

My question is, if i don't have the property under contract how do i go about showing the deal to a potential partner that i don't know and trust? Couldn't they just cut me out at that point? 

If i go the HML route, is it as simple as giving them the address and numbers and they provide me with a POF letter?

I have a residential construction background but this is my first time securing financing for a flip. Any advice/ insight/ tips would be greatly appreciated!

Thanks!

Josh McCarthy

[Joshua McCarthy]

Quote from @Jaron Walling:

@Joshua McCarthy This is exactly why REI is about relationships. If you developed/created/secured a relationship with the seller they should recognize it, or you should bail now. HML's are not interested in owning property. They're interested in the deal and making a return which is usually 8-12% depending on your investing experience.

If this is your first off market deal I'd tackle this on your own. You don't need a partner to get this done. Sounds like you need cash. If the DEAL supports it the money will find you. If not quite wasting the sellers time, your time, and find a better opportunity. 

Thanks for the reply!

It sounds like you're saying get the deal under contract, market the deal, and the money will find me. I agree with that. 

I also agree that i'd be better off doing the deal on my own. The numbers check out, so you're saying i should go the HML/ private lender route. How do i get POF to submit the offer? It could be as easy as submitting the numbers to a HML and they provide me with POF but i haven't gone this route yet so i don't know what i don't know.

Thanks again! 

Josh