How to decide if a cash buyer is legit

Arlington, Texas
Wholesaling
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How to decide if a cash buyer is legit

Ismail Sogbaike
Member since 2023 · 43 posts · 10 votes

I’m doing my first wholesale deal and I’m trying to decide if I can trust certain buyers, what are some things to watch out for.

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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Ismail Sogbaike:

I’m doing my first wholesale deal and I’m trying to decide if I can trust certain buyers, what are some things to watch out for.

First, I always ask if they are a wholesaler or a real estate agent. If they tell me they are an investor or cash buyer, I ask them for a pre-approval from a lender or they can provide their bank account statement, with their account number blanked out, along with the name of the bank and the banks phone number. 

It's a funny thing, people with money don't mind proving they can buy the property.
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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    3y
    Quote from @Ismail Sogbaike:

    I’m doing my first wholesale deal and I’m trying to decide if I can trust certain buyers, what are some things to watch out for.

    First, I always ask if they are a wholesaler or a real estate agent. If they tell me they are an investor or cash buyer, I ask them for a pre-approval from a lender or they can provide their bank account statement, with their account number blanked out, along with the name of the bank and the banks phone number. 

    It's a funny thing, people with money don't mind proving they can buy the property.
    3Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y

    See if they know the secret 2 legit handle signal

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  • Justin Vogelgesang
    Investor · Fort Worth, TX · Member since 2021 · 68 posts · 57 votes
    3y

    @Ismail Sogbaike ask them for a proof of funds. A serious investor will not typically withhold that information if they're claiming to be a cash buyer. 

    2Reply
  • John O'LearyPro Member
    Lender · Winter Park, FL · Member since 2021 · 737 posts · 412 votes
    3y

    Like @Justin Vogelgesang said, ask for proof of funds, and use sites like propstream or batch leads to see if they have bought any other properties "cash". Make sure they are not another wholesaler like New Western. 

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    1Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    3y
    Quote from @Account Closed:
    Quote from @Ismail Sogbaike:

    I’m doing my first wholesale deal and I’m trying to decide if I can trust certain buyers, what are some things to watch out for.

    First, I always ask if they are a wholesaler or a real estate agent. If they tell me they are an investor or cash buyer, I ask them for a pre-approval from a lender or they can provide their bank account statement, with their account number blanked out, along with the name of the bank and the banks phone number. 

    It's a funny thing, people with money don't mind proving they can buy the property.

    Disagree.  If someone I didn't know, that has no track record, just comes to me out of the blue claiming to have 'a deal' but can't tell me what or where, then says "Can you send me your bank statement?"  I'm going to laugh.  Even if my bank account number is removed (that's not very private anyway as it's on every check you write).

    My actual bank account balance is no ones business.  If they wanted to see 'proof of funds' I'd send them to my website that shows $x in property purchased w/o any investors or would tell them to look up the top 5 brokers in the city and call them and ask them about me.

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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    3y
    Quote from @Justin Vogelgesang:

    @Ismail Sogbaike ask them for a proof of funds. A serious investor will not typically withhold that information if they're claiming to be a cash buyer. 


     There are websites where you can buy "Proof of Funds" for the amount of your choice for $50.

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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    3y
    Quote from @Cody L.:
    Quote from @Account Closed:
    Quote from @Ismail Sogbaike:

    I’m doing my first wholesale deal and I’m trying to decide if I can trust certain buyers, what are some things to watch out for.

    First, I always ask if they are a wholesaler or a real estate agent. If they tell me they are an investor or cash buyer, I ask them for a pre-approval from a lender or they can provide their bank account statement, with their account number blanked out, along with the name of the bank and the banks phone number. 

    It's a funny thing, people with money don't mind proving they can buy the property.

    Disagree.  If someone I didn't know, that has no track record, just comes to me out of the blue claiming to have 'a deal' but can't tell me what or where, then says "Can you send me your bank statement?"  I'm going to laugh.  Even if my bank account number is removed (that's not very private anyway as it's on every check you write).

    My actual bank account balance is no ones business.  If they wanted to see 'proof of funds' I'd send them to my website that shows $x in property purchased w/o any investors or would tell them to look up the top 5 brokers in the city and call them and ask them about me.

    Guess we wouldn't be doing business together. Anyone can make websites that includes properties. And it says nothing about your current ability to close.

    The point is to verify ability to close, (not to get personal or be spoofed.)

    I agree to disagree.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    3y
    Quote from @Account Closed:
    Quote from @Ismail Sogbaike:

    I’m doing my first wholesale deal and I’m trying to decide if I can trust certain buyers, what are some things to watch out for.

    First, I always ask if they are a wholesaler or a real estate agent. If they tell me they are an investor or cash buyer, I ask them for a pre-approval from a lender or they can provide their bank account statement, with their account number blanked out, along with the name of the bank and the banks phone number. 

    It's a funny thing, people with money don't mind proving they can buy the property.

     I have a letter from my Banker at the ready we update it monthly..  its just a simple I have been doing business with Jay and his entities since 1994 and Jay and his entities maintain average balances of X in our bank if you need more information please dont hesitate to call  Dan  SVP said bank.. Never had that turned down or questioned.. And I am not sure if Dan has in the last 29 years gotten a call either.  when i was doing Auction .com we did have to use bank accounts.

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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    3y
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Ismail Sogbaike:

    I’m doing my first wholesale deal and I’m trying to decide if I can trust certain buyers, what are some things to watch out for.

    First, I always ask if they are a wholesaler or a real estate agent. If they tell me they are an investor or cash buyer, I ask them for a pre-approval from a lender or they can provide their bank account statement, with their account number blanked out, along with the name of the bank and the banks phone number. 

    It's a funny thing, people with money don't mind proving they can buy the property.

     I have a letter from my Banker at the ready we update it monthly..  its just a simple I have been doing business with Jay and his entities since 1994 and Jay and his entities maintain average balances of X in our bank if you need more information please dont hesitate to call  Dan  SVP said bank.. Never had that turned down or questioned.. And I am not sure if Dan has in the last 29 years gotten a call either.  when i was doing Auction .com we did have to use bank accounts.

    @Jay Hinrichs:  A letter like that would work just fine.

    The concern would be all of the "subto community's" participants. They say they are having a great time, but since almost all are new investors, pulled in by the hype that Subject To is "no money down" and "you don't need money to wholesale", they believe that. But, bottom line, they are broke. They have no money. Subject To costs money to do legally and wisely.

    The "subto community" are using these downloadable Proof of Funds letters to convince an unwitting seller into signing a contract, which they will then go out and try to find a buyer. It seems a tad bit dishonest.

    They say at the Facebook page, Proof of Funds will be provided if needed, for a fee, but there is nothing indicating which bank account the money is coming from or how much is in it. It’s just a fake, made up Proof of Funds.

    I have a property listed as FSBO right now on Zillow and I have been inundated with "wholesalers" who can't prove they have two nickels to rub together. When I ask if they have financing arranged, they say they "can get a Proof of Funds". When I say I want to see their name on the account or a phone number to their banker, they stop bothering me. There is only one reason I can think of for that occuring. It is only a fake POF.

    This is not theoretical to me, it's experiential and a real time waster. I’m trying to be nice and encourage the actual investors, but this kind of thing sure gets old.

    0Reply
  • Jerryll Noorden
    Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
    3y

    You make them put down a $2K non-refundable earnest deposit into escrow as a cashier's check. If you have a legitimate good deal, the real cash buyers will easily put that down. The others won't.

    0Reply
  • Melissa Nash
    Rental Property Investor · Orange County, CA · Member since 2016 · 740 posts · 529 votes
    3y

    Proof of funds? List of experience and personal and business referrals?? 

    0Reply
  • David Ramirez
    Investor · Tampa, FL · Member since 2019 · 1k+ posts · 1k+ votes
    3y

    1) POF
    2) NON-REFUNDABLE 5K EMD
    3) Check entity status and years in business
    4) Ask for the address of the last investment properties. 

    1Reply
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