I’ve been making offers using a “proof of funds” letter from a local hard money lender. I put out several offers the other day and almost all of them come back saying that they have other cash offers (they claim for more …but who knows) . It’s kind of frustrating as it seems there is a stigma with hard money but I find it hard to believe that there is really that many people that are paying all cash even though the amounts are relatively low.
For those that use hard money do you just make “all cash offers” or will they probably want proof of funds along with the offer? I’ve done non REO properties before with cash , but I don’t think they asked for proof of funds until a while after the offer was accepted.
If I just say i’m going to pay all cash , but then end up using a hard money lender latter they might be pissed, but I feel other investors in this area might be doing the same thing.
Are you saying they claim to have other cash offers specifically from non-hard money sources, or that they just have higher cash offers, period? There’s more cash out there than you might imagine – especially for low cost properties. I wonder if your offers are just too aggressive and they really do have higher cash offers (hard money or not).
You can find out in a few months by looking the sales price up at the county clerks office. If it’s lower than yours, your suspicions will be confirmed. I’m skeptical though.
In my experience, though I use my own cash, the banks could care less where the money comes from so long as you can establish up front that you really have access to it. As you know, unlike non-REO sellers, they want to see a clean deal with all the information presented up front.
I don’t think the bank will be pissed if you come in with hard money at a later date. I just don’t believe you’ll get that far without a proof-of-funds with your offer. Try submitting an experiment offer without a POF and see. Alternately, have your agent ask the banks agent if they have a problem with HML’s. No one want to waste the others time.
I imagine the banks are skeptical of your POF letter as they may know or have heard of the HML giving you the letter. If the letter is from an individual HML the bank will many times turn it down. If you have a HML you use have him make his letter with a professional looking letter head and wording.
Good luck,
donrock
It looks like a couple of them have taken the offers now and are considering my offer, but not accepted yet. Both are for offers that I submitted yesterday so we’ll see. Probably won’t hear back until Monday since they are Bank REOs.
Hope to get something relatively soon, but it’s just a numbers game I guess.
Also my earlier offers were more like letters of intent but they want an offer written up on the CAR form.
A lot of times the listing agent doesn’t want to deal with buyers directly.
Some of my offers probably were too aggressive so it makes sense they weren’t accepted.
Hopefully once I have an accepted offer, the HML agrees to find the whole purchase price otherwise I guess it is alright at these lower prices and I can just pay the rest of the money out of pocket.
But according to the comps they will be quite low if accepted at these prices.