proof of funds - Posted by Dee


#1

Posted by Sandy FL on January 22, 1999 at 08:51:52:

Said the blind woman from Florida.

I get your point, JohnBoy!

:slight_smile: Sandy


#2

proof of funds - Posted by Dee

Posted by Dee on January 20, 1999 at 21:52:51:

I Got a call from a RE agent today that took my offer on a junker. I offered cash …no contingencies …30 day escrow
and he stated that the seller(REO) said that before he answers on my offer that he may want to see proof of funds. I told him that the money isnt a problem and if I don’t close you keep my deposit. There’s no way I wouldn’t close. I’m going to flip this one and I don’t want to go to my buyers until I get a signed contract. what can I say to the Realestate agent to tell the bank to get them to forget about proof of funds and lets do this deal!
any answers… thanks…Dee


#3

What’s your track record? - Posted by hk CA

Posted by hk CA on January 22, 1999 at 12:16:40:

For anyone who has done several deals and has been able to quickly close or flip the properties, I suggest documenting your past deals (with regards to closing times and financing capability) into a portfolio that you can present to the seller, Realtor or lender. This will show that you are indeed a person that can make the deal happen and that you are not just a recent Carlton Sheets graduate with lots of enthusiasm but no experience or performance power.

The smart seller and/or Realtor should justifiably be concerned as to whether the buyer can make good on his/her promises. Often, time is of the essence and the seller stands to lose considerably if the deal drags on and then collapses.

The portfolio (which I still often use) suggests to anyone that I am a professional Real Estate buyer, I can and will perform, and my offer should be taken seriously. And because I can perform quickly, I expect the best terms and price.


#4

Re: proof of funds - Posted by SCook85

Posted by SCook85 on January 21, 1999 at 17:01:56:

Dee,
I too had this dilema many times. You can’t always address it. I first started putting offers in on a Letter of Intent. This allowed me time to find a buyer when my offer was accepted before I signed the contract. It has backfired on 2 occasions where I drageed out signing the contract and someone else came in behind me, but It’s worked more often than not.
I also got a prequalification letter from local lenders and started making a financing contingency instead of all cash. Technically all cash offers mean that you have the cash and you are not borrowing it. My realtor for awhile made me start putting financing contingencies but I’m back to all cash most of the time.
It won’t work all the time so don’t sweat it if they require more than you can provide. Just move on to the next one and make a deal with another property.

SCook85


#5

Re: proof of funds - Posted by Dan Fink

Posted by Dan Fink on January 21, 1999 at 08:04:46:

Dee,

You have two ways to handel this

  1. go to a private lender and line up the money show proof of funds, and when you sell the home offer it with financing. When you do this you can sell for a higher cost and to people who would not normaly be a buyer.

2)Have your buyers sign a non circumvent agreement that states your are to be paid the amount between what you had the property for sale at and the amount they bought it for. This is not the safest way to do it but it beats losing the deal. Also if you have worked with the buyers you are flipping to this may not be such a big deal because they know if they go behind your back they won’t see any other property from you. This is a small industry everyone (who is a player) knows everyone else and that thing gets around quick. A investor with a bad rep is about out of business or aleast very hampered.

Hope this helps

Dan Fink


#6

Re: proof of funds - Posted by JPiper

Posted by JPiper on January 20, 1999 at 22:47:33:

You say “There’s no way I wouldn’t close.” So why not just give them proof of funds if they require it??

JPiper


#7

Great idea (nt) - Posted by Rob FL

Posted by Rob FL on January 22, 1999 at 20:09:11:

nt


#8

Re: proof of funds - Posted by Dee

Posted by Dee on January 20, 1999 at 22:54:44:

I dont have that much money in my accounts. I know that I can flip it …but thats after I get a signed contract and call a few buyers. The agent stated that the proof would probably be any statements that I have to show the money and where it’s at. If I could show the money I would…in a minute.


#9

Re: proof of funds - Posted by Jim IL

Posted by Jim IL on January 20, 1999 at 23:10:26:

Dee,
Here is what I did on a recent deal where the realtor stated the same thing. I told them that unless the seller said something, do NOT worry about what “might” be said or happen, just submit my offer!
Of course my offer came back with a “counter offer” stating exactly that, and I’m sure that a realtor said something.
This is how I handled it: I sent the seller a letter with my acceptance of the counter offer, and in the letter it said the following,
"Currently we utilize several different funding methods. Some are private mortgage lenders, some are partners, and others are family. In order to secure final approval on any of these, we must submit a signed contract on any property we wish to purchase. This allows us to “Shop around” our sources, and make the best possible choice in our financing, thus securing a better financial position upon close of any property. Obviously you understand these are merely business decisions, and we want to make the best one for all parties. We take into consideration all the terms offered by our funding sources and then apply them to each property. We would like as quick a close as is possible, and once this contract is signed, we will work diligently to make that happen."
Of course my RE agent wasn’t thrilled, but I told her make sure the seller gets this, or I’m walking!
I also said that if this was NOT acceptable to the seller, then TOUGH, and then it was "on to the next deal!"
Well, the moral of the story is, this may not work for you, and yet again it may. All I know is that we CLOSED this deal last week.
It is the “Success Story” that I wrote for this website.
Good Luck,
Jim


#10

Re: proof of funds - Posted by JohnBoy

Posted by JohnBoy on January 20, 1999 at 23:03:45:

What happens if none of your buyers decide to buy the property?


#11

Re: proof of funds - Posted by Laure

Posted by Laure on January 20, 1999 at 23:44:26:

then she loses her earnest money and the seller gets it !


#12

Re: proof of funds - Posted by JohnBoy

Posted by JohnBoy on January 21, 1999 at 24:04:05:

But she said there was NO WAY she won’t close on this deal. So if her buyers passed on the deal, then what is the back up plan to close on the deal? Isn’t that the reason the bank wants the proof of funds? So there is no way she won’t close? Also I think her original post said she was offering all cash with no contingencies. So how do you guarantee to close if you don’t have the cash and your buyers decided to pass??


#13

Re: proof of funds - Posted by Sandy FL

Posted by Sandy FL on January 21, 1999 at 04:46:57:

If I was doing a flip, and couldn’t get a buyer to buy
from me, I would probably buy it myself. In that case, if they insisted, I guess I would have my hard money lender write a letter, but believe me, they don’t like to. Of course, they want to see a signed contract before they promise funds! So what kind of catch 22 is that?? Why are you all picking on Dee? This is no different than any other time someone has asked a proof of funds question. She is asking what strategy has worked for others. Ron LeGrand suggested whipping out a wallet full of credit cards, and waving them at the agent (“Which one do you want me to use?” haha).

I guess the pro flipper would say that you need a professional between you and the listing broker, one who represents YOU, one who will handle the proof of funds question with finesse. The listing broker who is representing the bank or the owner of the junker is doing their job for their client, the seller, thats all.

Sandy


#14

Re: proof of funds - Posted by JohnBoy

Posted by JohnBoy on January 21, 1999 at 12:10:16:

Yeah, it does sound like we are picking on her, huh? But that wasn’t what the intentions were. My intentions were to get her to think about what she was offering.

She said she doesn’t have the cash herself. Her only plan mentioned was to flip to another buyer that hasn’t seen the property yet. So what happens if her buyers look at the property and decide to pass? What is her back up plan? What is her out?

She said she was offering all cash, with NO contingencies. There is NO WAY she won’t close on this deal. With no cash and no buyers to follow through, what’s the other plan to close? She didn’t mention if she has a hard money lender lined up or not. Her post sounded like she will close no matter what basing that on her buyers to flip this too. What about having a clause that allows for an inspection to be done on the property with-in 7 days? Would that be to much to ask for? Then if your buyers pass on the deal you have an out clause.