Quick Feedback: Idea for Faster Proof of Funds Letters

Rehabbing & House Flipping
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Quick Feedback: Idea for Faster Proof of Funds Letters

Michael Lazarus
Member since 2019 · 1 post · 0 votes


Hey guys,

I'm thinking about building something to help flippers get faster Proof of Funds letters.

But i need some feedback..

Imagine this scenerio...: 

You spot a great deal on Zillow. You need to move fast.
You want to make an offer, but you'll need a Proof of Funds letter:
- Banks could take weeks.
- Hard money lenders can mean forms and waiting. the whole deal could slip away.

    So, my main question for you guys: How much of a roadblock is this Proof of Funds delay in your experience?

    The Basic Idea I'm Exploring: A simple Chrome extension that activates when you're on a Zillow listing:

    • You see a deal on Zillow you want to move on fast. But you'll need Proof of Funds.
    • You click a button and all the details are shot over to a lender.
    • The lender emails you a Proof of Funds letter same day.
    • The lender would require a one-time $250 deposit for the first POF (100% refunded if you fund a deal with them).
    • After that, any future POF letters you request via the extension would be free.
    • (It could also give a quick funding estimate.)

    What are your honest first impressions?
    Would this actually be useful or am I overthinking the POF problem?
    Honest (and even mean) feedback would be super helpful. thanks!

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    Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    1y

    I know it’s hyperbole, but perhaps lines like “Banks could take weeks” and “Hard money lenders can mean forms and waiting” exist because they actually care whether you're qualified—before they indicate they’ll lend you money or let you mislead sellers into thinking you're legitimate, under their name.

    If someone is truly qualified with the lenders behind your Chrome extension, why wouldn't they just pick up the phone, request a POF letter and a real bank statement, and skip the $250 junk fee? If your extension hands out POF letters to just anyone—qualified or not—then let's call it what it is: a scam.

    Websites offering these kinds of “proof” letters are a dime a dozen online, usually with no verifiable bank statement and zero credibility. It’s the kind of thing no serious professional should be associated with.

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1y

      its all fraud if the buyers are not actually being underwritten to actually qualify prior to issuing the POF

      POF letters are a joke most of the time. If its simply not a bank statement ..

      Or a very legit lender..

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    • Chris SeveneyBusiness Member
      Moderator
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      1y
      Quote from @Michael Lazarus:


      Hey guys,

      I'm thinking about building something to help flippers get faster Proof of Funds letters.

      But i need some feedback..

      Imagine this scenerio...: 

      You spot a great deal on Zillow. You need to move fast.
      You want to make an offer, but you'll need a Proof of Funds letter:
      - Banks could take weeks.
      - Hard money lenders can mean forms and waiting. the whole deal could slip away.

        So, my main question for you guys: How much of a roadblock is this Proof of Funds delay in your experience?

        The Basic Idea I'm Exploring: A simple Chrome extension that activates when you're on a Zillow listing:

        • You see a deal on Zillow you want to move on fast. But you'll need Proof of Funds.
        • You click a button and all the details are shot over to a lender.
        • The lender emails you a Proof of Funds letter same day.
        • The lender would require a one-time $250 deposit for the first POF (100% refunded if you fund a deal with them).
        • After that, any future POF letters you request via the extension would be free.
        • (It could also give a quick funding estimate.)

        What are your honest first impressions?
        Would this actually be useful or am I overthinking the POF problem?
        Honest (and even mean) feedback would be super helpful. thanks!


        Typically the only people who have issues with POF letters are those who actually do not have POF. We have always just provided a bank statement and its a non issue. If we were getting financing from a private lender we would discuss it with them, but POF letter in past has been after we have made the offer and waited for seller to accept offer.

        I think you are trying to solve a problem that really does not need solving - just my 2 cents which I am happy to be wrong.

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      • Jeff S.
        Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
        1y

        I know it’s hyperbole, but perhaps lines like “Banks could take weeks” and “Hard money lenders can mean forms and waiting” exist because they actually care whether you're qualified—before they indicate they’ll lend you money or let you mislead sellers into thinking you're legitimate, under their name.

        If someone is truly qualified with the lenders behind your Chrome extension, why wouldn't they just pick up the phone, request a POF letter and a real bank statement, and skip the $250 junk fee? If your extension hands out POF letters to just anyone—qualified or not—then let's call it what it is: a scam.

        Websites offering these kinds of “proof” letters are a dime a dozen online, usually with no verifiable bank statement and zero credibility. It’s the kind of thing no serious professional should be associated with.

        2Reply
      • Scott WolfPro Member
        Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 959 votes
        1y

        A POF letter should be easy if you have an actual relationship with a lender. I provide them all the time for my clients, but I know what their situation is, and if anything is close to being off, they understand my guidelines, and know what I need to get the loan closed.

        0Reply
      • Mike Klarman
        Specialist · NJ · Member since 2022 · 1k+ posts · 662 votes
        1y

        A POF letter can be obtained in a few different ways. Some lenders do it and some do not. The reason is, they can be tricky and misleading. You can show me a bank statement with 100k in it which tells me that you can afford a 400k house, but that's a snapshot in time. That 100k could be 50k in two weeks and the lender knows none the better and now the borrower is taking the POF letter around town making offers on houses they can not afford.

        Brokers hand them out like water, but be careful because it is your EMD on the line. I do give them to my clients that I have closed with before and I know their credit/capital situation. For new clients that want them I ask them what their financial situations is and I ask them their credit and I tell them that if those things are not true then the consequences are on them.

        0Reply
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