Wholesaling question

5 Replies

friends,

I am new to wholesaling and I'm working on securing my first deal in the state of massachusetts. I noticed that almost all of the properties in the MLS say that they want "proof of funds" or a "proof of funds" letter submitted with any offer. Since I am trying to get started in wholesaling or assigning the contract, how would i tackle this problem? How would this work if im only assigning the property to a cash buyer? Is there a way around this if possible? any help would be appreciated.

Clary

Clary,

For all MLS listings, you'll need to provide Proof of Funds (POF) to validate you can purchase the home for "all cash".

Can you partner with someone on this deal that has more experience and has POFs? Alternately, can you work with a hard money lender in your area to get the funds?

I suggest you tackle this deal (if it truly is one) with a more experienced investor. You can find those in your local REIA.

On another note, do you have a good amount of earnest money to put up (e.g.: $1K-5K)? If not, you won't get serious interest from the seller and their agent.

Note: If you are working with FSBOs this won't probably be an issue - at least in my experience in WA state.

HTH!

You can search online and find some various funders and transactional funding lenders that will just have an online form that generates a POF letter for you. Now you should be confident you will be able to find a buyer, but this is a pretty easy way to get the piece of paper that is required that I have never seen anyone actually verify.

I have no need for shenanigans for this, but I typically use these since I don't want to bug my actual lender 30 times a week to give me a letter.

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#1 yes you can get form letter POF but they are pretty obvious to spot and most sellers and agents know they are meaningless.

#2 If you are going after properties that are advertised like this as a wholesaler I think you are wasting time. These are not the type of listings you are going to be able to negotiate a low enough price to allow a wholesale. These listings have agents that are looking for a retail buyer.

To wholesale you need to dig deeper to find properties. Ones that aren't listed yet preferably. Certainly ones without a realtor attached.

@Clary C.

As shaun has said, what you are looking for is transactional funding. Google search CSA Creative Success Alliance. I have spoken with these folks and they seem like a good company who also offer coaching services. hope this helps

I agree with Eric that listed MLS properties are not great targets for wholesale deals. Not that you can't do it but you really have to luck out and get them way down off of list. If the place was close to a deal at list there would be a lot of competition and thus again hard to wholesale at a reasonable price.

Best luck with MLS is old stuff where they might take a discount. If you can get it good enough below the list that you can still offer back to your buyer for LESS than it was listed for you could have a deal.

(Don't go and repackage overpriced garbage for even more than people weren't willing to pay in the first place)

I will disagree about the POF letters though. Almost every property I've bought in the last 2 years has been with the BS online POF letters. In my experience nobody checks them. It is just a piece of paper that the bank requires to be in the file. Now if these are retail sellers I would believe that they may look into this. However in this market an MLS listing looking for a POF letter is a bank unloading an unfinanceable junker 95% of the time, and 99% of the rest are short sales.