I'm new to the wholesaling business and I have some questions that I was hoping someone could answer for me.
I'm trying to get my first wholesaling deal and I am currently looking at properties in the MLS. Most of the deals I'm seeing on the MLS are asking for "Proof of funds" letters to be submitted with all offers especially from cash buyers. What should I do when I run across this? I'm looking to assign the contract but I won't be able to get any properties under contract without a prof of funds letter. Any help would be appreciated. Thanks!
thanks for the response joe. I am actually planning on submitting offers under my LLC not my personal name so I won't be using any personal bank statements. Anyone have any other options?
If you have the funds just show proof if you want the property. Wholesaling off the MLS, while not impossible, it will be challenging. I am a realtor and if I see an offer that says "and or assigns" and I don't know the wholesaler I typically advise my client against accepting that offer. In Dallas homes are getting multiple offers and sellers do not want to tie up their properties to individuals who have no intention of purchasing. I would build your buyers list before trying to wholesale. You need to ensure you have a buyer before you try to tie up a property.
A lot of wholesalers here in Dallas have burnt themselves by giving the seller one buck to tie up their property for 30 days with no intention of purchasing, and the realtors are passing the word of dishonest wholesalers.
if you do not have the funds to pay cash you have to options as an honest bizzness man and seeing that your a marine I would assume that you are.
You need a money partner that has the funds and you need to partner with them. If you have the funds personally deposit them in the LLC account.
If your trying to buy properties and flip them with smoke and mirrors your late to the game I am afraid.. especially in the hot markets.
Depending on the people asking me I will provide proof of funds on deals I would be funding or going in on. And my Proof of funds are CASH.. And they will sway the deal in most cases I have done that for a few BPers ..
There are also those in the US that sell Proof of funds to folks like you. They will charge a fee... I provided a few POF to Bpers as a courtesy. But I kind of like the folks I was dealing with and did it as a favor.
A lot of Transactional Lenders will let you download & print property specific POF letters, however, most of your more educated realtors know they are bogus, so use your best judgement.
Not only most real estate agents, but the banks handling the REOs also know that the pof letters are worthless, when printed off a website. They are looking for bank statements, retirement fund statements, of proof of funds from a recognizable bank, etc.
Hello Everyone, Clary, I'm also new to this and working hard to get that first deal. Building a Buyers' List has been pretty challenging. Have any of you heard of Insiders Cash? I'm planning on using them for Proof of Funding Letters and/or Loans?
If you used them for the proof of funds, letter makes sure the funds can be verified with a bank statement. You don't want to start out by providing fraudulent proof of fund's letters to sellers.
Understand, POF means cash in an account in Your/your LLC's name, Not from any type of lender. A POF from a lender means it's a financed deal, Not a cash offer, and you'll need a financing preapproval. We see these all the time, from either bogus Internet sites, or even local HML's. It means Nothing, except that the buyer is trying to wholesale the property, except maybe with a local HML, then we'd want to see the HML lending stipulations and the buyer's 35% or so in required cash, and if the offer was clean, other than that, and we thought he was really looking to buy and rehab, then maybe.
Assuming you DO have a bank statement that has sufficient funds, you can write a letter that you are making the personal funds available to your LLC for the purposes of purchasing and renovating real estate. That and the bank statement should work.
Often times we see the bank write a letter verifying the balance of the buyer. Some buyers prefer this as they don't want to give a statement with their account number and all the different transactions for the last month or quarter. These are bona fide POF, verifying actual funds, not something copied from the interent.
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If your attempting to get your first wholesaling deal you should attempt to obtain off market properties not properties that are available to the public. Approaching an "investor" with a property that he is probably aware of will take away from your credability. Devote you time attempting to get "off market" properties that are priced right. Food for thought. Semper Fi
That is some good information. I approached a lender with 4 properties in the very beginning and was denied. I didn't have them under contract and was trying to put a loan together of the lenders choice of properties, with rehab figures and everything. I wanted to be able to go to the Realtor with the POF and knowing I had the loan. Learned the hard way don't give out all that info. 2 were bought within 30 days after I did that, from someone not in the area to wholesale. 1 was listed as a rent to own from someone out of the area. Lesson learned.
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