What to say in Pre-Qual Letter - Posted by Emily (NC)

Real Estate Investing
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Posted by Newbie2 on July 08, 2002 at 23:44:15:

That shed a little more light on the process for me. Thank you, Brian!

Newbie2

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What to say in Pre-Qual Letter - Posted by Emily (NC)

Posted by Emily (NC) on July 08, 2002 at 21:42:08:

Hi all,

I searched the archives but could not find an answer to this relatively simple question. I am a newbie looking to get started in flipping and have started talking with some of my contacts (friends and family) about whether they would be interested in acting as my hard money lenders. They’ve said yes, but since they don’t do this as professionals, and it is my first time through, I was wondering what I should write up for them to sign as a pre-qualification letter.

I understand I will need some proof of funds with me when I go talk to realtors, in order for them to take me seriously, and I want to do it right.

Also, for those of you who have loaned money before, is their anything complicated about it (legal, tax issues…) can I just write a promissary note with the interest and terms and start making monthly payments?

Thanks for your help, I just love this website and I have learned so much here from this wonderful community.

Emily

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Re: What to say in Pre-Qual Letter - Posted by DavidV

Posted by DavidV on July 09, 2002 at 19:33:58:

Hi again Emily. Good to see you’re still going at it since the convention. And i suppose you’re all graduated by now.

You may want to pull up your state security laws to see if there may be anything goofy in there. For instance, in my state you have to give
a deed of trust and note to your money guy on the particular property you use private funds for. I can’t just borrow funds from dear old Mom and not give her a deed of trust. Or i can’t collateralize another property for the one i’m borrowing private funds for. These instances fall under the “exempt securities” for MS.

Or see if you can find someone doing this and pick their brain. Be careful as some do it without knowing all the rules to play by. Good Luck.

David

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here’s what mine says - Posted by Brian M. Powers(MI)

Posted by Brian M. Powers(MI) on July 08, 2002 at 21:49:48:

Dear Mr. Powers:

Please be advised that your application for a mortgage loan has been pre-approved in the amount of $XXX,XXX subject to our receipt of:

  1. Satisfactory Appraisal
  2. Marketible Title
  3. Execution of All Required Documentation.

Sincerely,
John Doe
ABC Mortgage

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Re: here’s what mine says - Posted by Newbie2

Posted by Newbie2 on July 08, 2002 at 22:48:06:

I’m totally new to real estate investing, so forgive me if this sounds like a stupid question, but is that legal? I’m assuming you just make up what looks like a pre-qualifying letter on your computer?

I am studying the Carleton Sheets course and have questions about pre-qualifying as well. I have ok credit but no consistent income. I’ve started talking to brokers and have spoken to a couple owners and am kind of feeling in over my head in this seller’s market. Any additional info you can give would be great. Thanks in advance.
Newbie

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Re: here’s what mine says - Posted by Brian M. Powers(MI)

Posted by Brian M. Powers(MI) on July 08, 2002 at 22:51:52:

pre-qual letters are simple to get. the lender isnt gauranteeing you anything. all they are saying is that if you turn out to be qualified then they will lend to you. you should be able to obtain one quite easily.
BMP