I Am About To Make My First Offer... (Proof Of Funds)

Gerald,

Excellent question on this! I look forward to seeing the answers you receive.

That letter sounds pricey!!! Especially considering that some assignment deals, you may only be making $1K to $5K. I see they have you over a barrel, but still....seems a little ridiculous!

Freeindeed is queen of assignment deals so maybe she will comment here! I know there are many more out there....look forward to what you hear!

Happy investing!
Louisa

I just saw that Hartwell site today when I was searching for info for POF funds prior to coming to Dean's site. I saved the information for Hartwell, but I did not know it cost that much for a POF letter. The only thing is, I'm not sure how to obtain a POF letter when doing an assignment of contract. I am assuming you are not dealing with a FSBO if a POF letter is required. I do know that some individuals may provide you with a POF letter if you do a joint-venture with them.

and to anyone else in need of POF letter. Go to www.cashformyclosing.com or here is the link to the letter. Simple just like Coastal Funding just fill out and they email it to you.

http://cashformyclosing.com/proof-of-funds/

Hey,

I was searching the site and came across a post that Yuri77 posted last month. If you go to the search bar on Dean's site and type in "alternative to coastal funding," you will see the post he put up there. In his posts, he said a free POF letter was emailed to him. He also included the link to the website on his post. Wow, the DG family really does have a wealth of knowledge. I'd rather search this site through hundreds of post then laboring online for information that costs a lot of money. And to think I was considering doing a joint venture with someone just to get a POF letter. I'm also going to check out the site Rich2000 just posted.

coastal-fuunding for my POF's even though I intend to use an entirely different source to pay at closing. After all, they(sellers)just want to get paid in the end. I don't think that it's misleading to anyone when you're only proving that you have the funds available to pay them with. After all, who says that closing always ran as smoothly as everyone would like?

Thanks all for all the feedback and information. This was helpful.

@louisajhc: Yes, it way to high for me. I am just starting out and don't want to risk too much money in the beginning.

@dukeofsc: The seller for this first deal is being represented by a real estate agent. I am also looking at a second deal that is FSBO and I should be ok on that one without a proof of funds letter. Looking at the post (Found an Alternative to Coastal Funding) by Yuri77 you mentioned, it seems that Real Estate Day Funding (http://realestatedayfunding.com/) is only supporting double closings. I have sent them an email requesting confirmation on if they will provide a letter for assignment of contract deals. Thanks.

@Rich2000: The Cash For My Closing website (http://cashformyclosing.com/) came up my Google such as well but it was another website that seemed to imply that they only do this for double closing deals. I got that impression from this quote from the website:

I just sent them a message asking if their letter can be used in my situation. If I hear something I will let every know what they said.

@Maximilionalpha: Also, did this same thing with Coastal Funding (http://www.coastal-funding.com/), but I have not received a response from them yet.

I want to make sure I am not violating any agreements.

Thanks all.

at coast-funding; ryan@coastal-funding.com. He'll answer your questions regarding their Pof's. Also, you say that you're going to be assigning this property once you lock it up in contract, so either way you're not going to make it to the closing table, the end- buyer is, so whether or not you actually have the money doesn't really matter since you just intend to bird dog.

Thanks Maximilionalpha! I just sent him an email. This should be a big help in getting an answer.

From my understanding for the 2 sites where the POF letter is free, all you need to do is enter the information and the POF letter will be emailed to you. There is no risk for them with a POF letter b/c the they have no money tied to the deal. I looked at both sites and it appears that all you need to do is enter the amount and the POF should be sent to you. Give it a try and let us know. The post by Yuri77 said that's what he did and a POF letter was sent within seconds to his email address.

also, it is nice to have a couple strategies you can go with...even if you plan to assign a property, it is nice to have the back up of a possible double closing...which is what coastal-funding and other transactional companies do...

nothing wrong with 2 options...Who knows, maybe you assign the first couple, then you have a chance to do a double closing on your next deal, cause you may make more that way...So keep your options open when making offers...

Ya never know what may come up, and with as many options open as possible, the better chance you have of completing the deal

No replies yet from my emails and no responses from the use of these websites contact pages. I am going to send out another round sometime tomorrow. I even checked my junk mail folder. Nothing there either.

@dukeofsc: You are definitely right on the no risk to them so I may end up going ahead and using one of these letters anyway. I would like to get at least one response though.

@marc: The backup option is great idea. I am currently only dealing with investors as my buyers. Yes, your second paragraph matches my plans pretty closely. That being, to do a couple of assignment deals and then work on understanding and utilizing double closings. I just want to concentrate on one strategy for now.

Hi Gerald, thanks for posting this, I'm following it closely. This is exactly where I'm at also (looking for a POF letter) and I too was a bit hesitant about using Coastal Fundings POF letter since it said specifically it was only for a back to back one day closing transaction. I look forward to their response.

Hey listen guys. In this business you have to think creatively and wing it as you go along. Just look at any home buying situation like this; You "intend" on doing a double-closing, but later on down the line things happen and you're now faced without an end buyer. Well you had intended to do a double closing(wink,wink), but your end buyer pulled out at the last minute. Well the seller /agent doesnt need to know that you were planning on doing a double closing, they just needed to know that you have the funds to even do a closing so as to lock up that property in contract. That and making sure that you have buyers who are able to pay with cash and are interested in that property. I'm pretty sure that I can tell you now if Ryan at coastal-funding knows your real intent about the proof of funds that you're going to get him wise as to how most of us are using their proof of funds letters and (a)they're either going to start charging people (b)going to make us start having to go through a lot of red tape just to get one of their POF's. If you'd just weed out your serious buyers(investors) from those who don't have actual funds(retail)then I believe that you'll be just fine. It takes a lot of honing ones strategy to find the niche that's right for you. Also look into Lighthousecapitolfunding.com I think maybe their proof of funds would be more closely to what you are trying to work with.

Good luck to you and God speed!

Ok guys, I have good news and I have bad news. Let's start with the bad news. I always like to get the most difficult stuff out of the way. That's just my personality.

The Bad:
I received two replies from www.coastal-funding.com. One from when I used their contact form and one from when I sent an email to Ryan directly using the email address that Maximilionalpha provided. Thanks Maximilionalpha. Both responses pretty much said the same thing. Here they are:

Now that you are all punching your computer screens out of their misery, here is the good news.

The Good:
After I received these responses I made the assumption that all the other companies out there that offered this service would indeed have this same stipulation. So I decided to stop sending emails and asking this same question when I knew I would probably get the same result. So how do you get around this or use this obstacle to your advantage legitimately? I kept asking myself that question over and over. Finally a solution popped into my head that was so simple I almost felt ashamed I did not think of it immediately.

So here it is.

Conditions:
1. You find a great deal you plan to do an assignment on and you have to work through the sellers real estate agent.
2. The real estate happens to ask you for proof of funds before they will move any further.

At this point, this deal just changed from a straight assignment to another investor to a assignment/double closing. In reality it is going to just be a double closing. The investor you were going to assign this deal to has to close on the property to complete the deal anyway so this should be no big deal to them. To keep your good reputation with your investors, you need to be up front and honest on how much money you will make on the double closing just as if this was an assignment of contract deal where that information is out in the open for the assignee investor to see anyway. So under this circumstance, you can use the proof of funds letter from any of the previous companies that have been mentioned in this thread.

The only real negative to this is that for those who just want to assign their deal, collect their money and move on, they won't be able to do that in this situation. But hey look at it this way. At least you will end up making money, it will just take a little more effort.

Thanks all for the input on this thread.

I would love to get the name of the site or post from Yuri77. I am in the same boat.

Cheers,

Ty

@fishflyguy: See the quote below from a post from me that was earlier in this thread. In short, all of these POF sites only support double closings.

Great stuff, thanks everyone.

Dan

Hey VIG, so what your basically saying is you'll get your paycheck when your end buyer closes on the deal? As opposed to if you weren't doing a double closing and you could just receive your paycheck when you finish your business with your end buyer? Is that correct?

@dantheman24: That's right, I would have to wait, basically be involved in the whole transaction in a double closing. The end buyer would be closing with me on the B to C side of the transaction. This is probably the best situation for us as investors that want to build up confidence with the people we deal with on the A to B side of the transaction. This could be the seller's Realtor. If they see your face throughout the whole transaction then they might be more inclined/eager to deal with you in the future and also suggest you as a buyer to other Realtors. Also, you are there to make sure the deal goes through to completion.

So even though you have to be more involved in this type of scenario and you can't just take your money and run, it is probably better for you in the long run.

I submitted my offer on an REO with the intention of assigning it. I used one of the POF letters that was supplied in this thread and got a call back from the sellers agent, saying that the letter implies that a loan is needed and not an all cash transaction. Since my investors are paying with all cash, is there a POF letter that implies an all cash transaction? The agent says he would like to see like a bank statement with the sufficient funds to prove i have the money. i didnt tell the agent i was assigning it, i was very vague with him telling him that i plan to buy close and immmediately resell the property. can any1 give me any suggestions on what to do?

I have ran into this same issue. You have a couple of options here:

1. Some of these proof of funds letters companies will setup an account with your name on it but this is expensive and is not worth it unless you are going to make a huge profit.
2. You can get a loan from a hard money lender. This can be a little cheaper than what the POF guys charge and you will have the money for a longer period of time and that can allow you to do multiple deals with the same source of funds.
3. You can ask a relative, friend or both to front you the money for a day or two.
4. You can abandon the bank owned stuff all together and do real assignments until you get enough liquid cash to engage in bank owned properties.

You can't really do true assignments on bank owned properties. They are going to want whose ever name is on the contract to be the person that actually buys the properties. Unless you do a bird dog type deal with your buyer then the contract will be in your name.

I would suggest doing a double closing on the bank owned properties. Just keep that to yourself and don't tell the bank what you are doing as far as the double closing is concerned. Some banks won't like that.

if you setup an account with the POF letter site, does it show like a seperate account with the funds inside? how expensive is it? How exactly do you go about getting a loan from a Hard money lender, does credit score and all that play into account. lol, i wish i had friends or family that had 200 hundred something thousands in their bank account. working with banks is a hassle in terms of doing assignments, but ive heard other people have success with it so i thought it might of worked.

@dantheman24: Yes, it is an account with your name on it. The one I checked with said it would be 7% upfront. Once the deal was done, the money was gone and you would need to request another account at a cost of another 7% if you wanted to do another deal.

This is why the hard money lender is a better deal. It may cost you 10% to 15%, but you will have the money for possibly 180 days. If you hustle you can do a lot of deals in that time. There are so many REOs coming out right now that I could see myself doing probably 8 deals or more in that time period. Let's say you get $5000 per deal, that would be ~$40,000 (minus closing and agent fees). Let's say you borrowed $150,000 from a HML at 15%. You would owe them ~$22,000. So half of your profit would go to them. But hey, that's $20,000 more than you had before. So it is would be worth it IMO.

I would say get involved in your local REI club. You will probably find HMLs there.

Gerald,
which POF company offers you an account and as far as paying them their 7% or whatever, is that upfront or after the closing?

@Maximilionalpha:
I only checked with two of them and you had to pay upfront. www.coastal-funding.com was 7%.

Then here are the two options with Hartwell Ventures www.hartwellventures.com, which are just crazy for people who don't have much money. But if you have some deal that you NEED $5M to do and you will make a crazy profit on then I can see doing option 2 below:

Option 1: We give $5M to borrower for 4% which is to be paid at the time we provide them the $5M for proof of funds. They will have the funds for 60 days. We will also let them close with those funds with no additional money owed at close.

Option 2: We will come in as the money partner and share on the profit spread. We give $5M to borrower for $3000 paid at the time we provide them the $5M for the proof of funds. They will have the funds for 60 days. At close we will split the profit spread 50/50.

*** I forgot to mention this from Hartwell Ventures:
-For us to consider Option #2 we will need to be confident that the back end buyer is legitimate. We will need to see the contract and a bank statement showing that the end buyer has the capability to make the purchase.

Do these POF's letters work? I think most bank would rather see bank statements to make sure some1 has the money, if not banks sellers and their attorneys would rather see a bank statement showing they have the money.

@dantheman24: I have found that in almost all cases they want to see either a bank statement or a letter of credit. IMO, these letters will work if you are dealing with agent or a bank on REOs and paying "cash".

Everytime I tried to submit an offer on a REO, I was asked for a bank statement.

go to hartwellventure.com they clearly state the following;

VERIFICATION OF DEPOSITS:

If you are obtaining financing or have any other type of transaction that requires you to have a certain amount of liquidity or funds available that you currently lack we will provide you the necessary funds to meet your transactions needs. Our investment trust is fully liquid and depending on the needs of your transaction we will place funds with either escrow or a banking institution in your name. Seasoned accounts available.

Yes, see my quote below from my post earlier in this thread:

have your investor or retail buyer provide you their proof of funds letter, if you don't have your own POF letter or bank statement since you're not buying the property directly to add to your investment portfolio.