I Need A Proof of Funds Letter Today!

Investor · Detroit, MI · Member since 2008 · 296 posts · 11 votes

I have a seller, and a buyer lined up. I need a free proof of funds letter as soon as possible. Can anyone help me with this task? Also can anyone recommend to me any great virtual title companies?

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Rheutelia Cummings

Real Estate Investor · Los Angeles, CA · Member since 2010 · 5 posts · 29 votes

15y

I agree with you Richard. To the young lady. ... I would ignore all the discouraging comments. Each and every person who commented negatively or felt the need to put their 2 cents in had to start from somewhere as well. I say try it... and if you fail at it then you know what to do next time around. You learn the business by doing...not by taking advice from discouraging people...who probably lack the proper education, which is why they did not provide you with a solution... (That has been my experience in the past) Biggerpockets is a networking site to help new investors, not to discourage others. So to all those individuals who had 2 cents worth of comments... should go by the old saying.. " If you don't have anything nice to say, then don't say it at all"!! Instead, I would offer her some advice that is worth more than a penny!

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James Vermillion
Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
15y
Tiara, why didn't you get a proof of funds lined up before you found a buyer and a seller? It seems like you risk losing deals and hurting your reputation if you go into a deal unprepared. I know that doesnt help you now and I hope you get the proof of funds and make money on this deal.
5 Reply
Tiara Murray
OP
Investor · Detroit, MI · Member since 2008 · 296 posts · 11 votes
15y
I had a company in mind, but when I went to their website, it states that they now charge for POFs. Do you know of any company that offers them for free?
0 Reply
Stinson Bland
Wholesaler · Dallas, TX · Member since 2011 · 294 posts · 152 votes
15y
Do you have access to the funds? If not, how do you expect to show proof?
4 Reply
Kevin Priester
Investor · Lake Mary, FL · Member since 2009 · 63 posts · 20 votes
15y
Like she said there are companies out there that provide POFs..the unfortunate part is that most of them charge a fee.
3 Reply
Tiara Murray
OP
Investor · Detroit, MI · Member since 2008 · 296 posts · 11 votes
15y
Problem solved gentlemen. Thanks for your replies.
5 Reply
Michael R.
Real Estate Investor · NY · Member since 2008 · 313 posts · 87 votes
15y
Ok I am not a wholesaler but wouldn't providing a fake pof letter be fraudulent?
2 Reply
Tiara Murray
OP
Investor · Detroit, MI · Member since 2008 · 296 posts · 11 votes
15y
Its not fake, I fully plan on using the flash lender if a simultaneous close is not an option.
0 Reply
Manny Cirino
Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
15y
For your proof of funds letter you should try and find an investor friendly title company in your area. Most likely they will have or know of a transactional funding company. This is the best way to go because if you are closing deals at this title company they will always back you up should the seller decide to verify the letter. Ant to Micheal R. These letter are not fakes they are just not provided my mortgage lender usually hard money lenders or transactional funding companies.
2 Reply
J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
15y
Originally posted by Michael R.:
Ok I am not a wholesaler but wouldn't providing a fake pof letter be fraudulent?

We'd had this discussion here before...

Many of us firmly believe that a POF letter that doesn't represent funds that are actually controlled by the buyer is meaningless. Proof of funds means that there is 100% chance that you'll have access to those funds (they are YOURS), but that's not the case when the POF is provided by someone else.

Just because a transactional lender provides a POF doesn't mean they'll actually loan you the money, so the POF isn't a guarantee that the funds are available.
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8 Reply
Manny Cirino
Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
15y
My transacional lender loans out the money as long as the paper work is already at the title company. They do not give you the run around or make you jump through hopes. If you have a deal, paper work and set closing date your money is there at closing.
2 Reply
Nick L.
Rental Property Investor · Pittsburgh, PA · Member since 2011 · 56 posts · 13 votes
15y
Here is a company I ran across that does provide the letter: http://www.************************/

Is it wrong to use the letter to keep the deal alive and then find the funds before closing?
0 Reply
Tiara Murray
OP
Investor · Detroit, MI · Member since 2008 · 296 posts · 11 votes
15y
Hey Nick can you pm me that website please?
0 Reply
James Vermillion
Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
15y
Originally posted by Nick L.:
Here is a company I ran across that does provide the letter: http://www.************************/
Is it wrong to use the letter to keep the deal alive and then find the funds before closing?

That is purely an opinion type question and I believe it is 100% wrong. As J Scott said a proof of funds was designed to show that you have a lender that is willing to fund a purchase...not to keep a deal alive long enough to find different funds. By doing this, you risk allowing a deal to fall through, ultimately hurting your reputation.
3 Reply
Stinson Bland
Wholesaler · Dallas, TX · Member since 2011 · 294 posts · 152 votes
15y
Nick L.,

I believe it is unethical to show a false proof of funds. Do the legwork and get access to the money needed to be a real estate investor. Get approved by a few lenders or find investors that are willing to partner with you. If you are unable to secure the money; you may not be ready to be in real estate. This is a REAL business and you’re dealing with most people’s largest asset (their home), their livelihood, and their family… please treat the situation accordingly.

Too many guru's have flooded the world with false knowledge that wholesaling is easy, free, and anyone can do it. This is saturating our industry with people that are making B.S. offers that they cannot close on. If you make an offer, be honest with your client (seller) and tell them whether you plan to buy the property or flip it to another investor. Most sellers will except your deal if you've made a fair offer, built good rapport with the seller, your knowledgeable about your field (REI), and can speak in a way that they understand and trust you. Be honest and transparent with your client and they'll respect you for that.

If you're going to wholesale homes, build a REAL business and set up the proper structure. You'll need access to money, a title company, comparables, a contractor, an attorney, accountant, tax ID (LLC), and many other tools to run your business.
17 Reply
Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
15y
I think we are using the term "proof of funds" when we mean "mortgage pre qualification". Proof of funds mean you have those funds under your sole control, not that you have been approved for funding. A pre qual letter is a letter stating that if certain conditions are met a lender will lend money to you because that lender has done a preliminary background check and you are qualified, in his opinion.

Sellers who use proof of funds letters as a shortcut for qualifying buyers are bound to be disappointed quite often. It is a huge difference between having $100,000 of liquid assets in your bank account and paying someone to say that they have $100K that they will lend you contingent upon some other occurance.

Then again, profitable deals are sometimes put together by people with nothing more than persistence, knowledge and imagination. Everyone must make their own decision as to what is ethical or not. When a buyer mistates his/her ability to close on a property I am selling and the transaction fails to close it is not of major concern to me. However, the same situation with a homeowner struggling to make ends meet, steering at foreclosure, and inexperienced in real estate transactions may result in devastation to him and his family. Something to keep in mind while persuing your fortune via "nothing down" techniques.
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8 Reply
Mitch Kronowit
SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes
15y
Call me silly, but if somebody truly has the funds, proving it shouldn't pose much difficulty.
2 Reply
J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
15y
Originally posted by Manny Cirino:
My transacional lender loans out the money as long as the paper work is already at the title company. They do not give you the run around or make you jump through hopes. If you have a deal, paper work and set closing date your money is there at closing.

Are there any circumstances where the lender won't lend the money?

What if you end-buyer backs out two days before closing? What if the property doesn't appraise? What if the lender goes out of business? Etc...

If there is *ANY* situation where the lender will not lend, then it's safe to say there isn't 100% guarantee you have access to those funds. And if there's not 100% guaranteed access to the funds, it's not a *PROOF* of funds letter. As Don pointed out, it's just a pre-qualification letter based on meeting certain criteria (having an end-buyer, hitting appraisal, lender being in business, etc).
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1 Reply
Richard Graham
Real Estate Investor · Outer Banks, NC · Member since 2009 · 121 posts · 44 votes
15y
Any time you are borrowing money it is never "100%" guaranteed, banks, transactional funding, private lender, or grandma's mattress. If the money is not yours, its not guaranteed. All these options can and will pull out of a deal at the drop of a hat.
I would not discourage this young lady from stepping up to the edge and jumping. You have to start somewhere. Just disclose to the parties involved what you are doing and explain the risks.
12 Reply
Rheutelia Cummings
Real Estate Investor · Los Angeles, CA · Member since 2010 · 5 posts · 29 votes
15y
I agree with you Richard. To the young lady. ... I would ignore all the discouraging comments. Each and every person who commented negatively or felt the need to put their 2 cents in had to start from somewhere as well. I say try it... and if you fail at it then you know what to do next time around. You learn the business by doing...not by taking advice from discouraging people...who probably lack the proper education, which is why they did not provide you with a solution... (That has been my experience in the past) Biggerpockets is a networking site to help new investors, not to discourage others. So to all those individuals who had 2 cents worth of comments... should go by the old saying.. " If you don't have anything nice to say, then don't say it at all"!! Instead, I would offer her some advice that is worth more than a penny!
31 Reply
Chris Martin
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
15y
Originally posted by Rheutelia Cummings:
I agree with you Richard. To the young lady. ... I would ignore all the discouraging comments. Each and every person who commented negatively or felt the need to put their 2 cents in had to start from somewhere as well. I say try it... and if you fail at it then you know what to do next time around. You learn the business by doing...not by taking advice from discouraging people...who probably lack the proper education, which is why they did not provide you with a solution... (That has been my experience in the past) Biggerpockets is a networking site to help new investors, not to discourage others. So to all those individuals who had 2 cents worth of comments... should go by the old saying.. " If you don't have anything nice to say, then don't say it at all"!! Instead, I would offer her some advice that is worth more than a penny!

You should have stopped after the first three sentences. I don't have anything nice to say after that. If you don't want comments, nice or not, don't post. Calling the "advice from discouraging people...who probably lack the proper education, which is why they did not provide you with a solution... is absurd. The collective "education" of BP Nation is why most of us are here.

You want a "solution"? To the OP, Just print off a copy of your (or your company's) bank statement.

This is in the 'wholesaling' section so everyone realizes the OP has no money and is just brokering this deal... so "solution #2": Just print off your buyer's bank statement. There. Two solutions. As pointed out by everyone else, the reality is the OP has no proof of funds because she has no funds. Everyone else knows this. That's why I didn't post the above paragraph... obvious to those of us who have the proper "education".

That's my 2 cents worth of comments.
7 Reply
James Hiddle
Altus, OK · Member since 2008 · 2k+ posts · 690 votes
15y
I don't think anyone here is discouraging anyone just honest opinions from investors that know their stuff.

You'll find the whole transactional funding/POF stuff is becoming obsolete right now. Most banks are getting wise and not excepting these POF's from other sources due to the fact that most investors have abused this left and right and the banks have seen right through them.
3 Reply
Bart J.
Los Angeles, CA · Member since 2011 · 49 posts · 5 votes
15y
There are escrow companies out there that will provide proof of funds if you are using them to closed the deal.
1 Reply
Chris Martin
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
15y
Originally posted by Bart J.:
There are escrow companies out there that will provide proof of funds if you are using them to closed the deal.

Before or after you fund escrow?
0 Reply
Bart J.
Los Angeles, CA · Member since 2011 · 49 posts · 5 votes
15y
Before. But you must sign their paperwork you are using them to closed.
0 Reply
J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
15y
Originally posted by Rheutelia Cummings:
Instead, I would offer her some advice that is worth more than a penny!

Okay, here's some advice on getting a Proof of Funds:

1. Save money
2. Put it in the bank
3. Print out a copy of your balance

Ta-da! You have a Proof of Funds...

The other option is to make offers and to be honest about the fact that you'll be borrowing the funds, whether it's from friends, family, a bank, a transactional lender or whomever...

But, if you're looking for a way to show proof of funds without actually having the funds at your disposal, all I can offer is discouragement...sorry...
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