I have a lender requesting a proof of funds letter. Now I don’t have one and looking into getting one from a lender. On the other hand I really don’t want to go this route. Because I am not looking to fund the deals my self. So what would be the best way to handle this. :?:
If you are wanting to fund the deal yourself, and you have the cash (credit) to do so, then all you need is a letter showing proof that the cash (credit) exists. All a POF letter does is show that funds are available and ready to transfer upon closing.
One thing you do not want to do is make one up. If you make up a POF and then can’t produce, you open yourself up to fraud charges and an investigation that may be initiated by the lender you provided the POF too, but will almost certainly end up being investigated by the feds. My 2 cents worth.
From the lender’s point of view, it doesn’t make any sense to sell a house to someone who doesn’t have any way to pay for it.
Explain to them how they are going to get their money. That is all they want to know.
Get a POF from a hard money lender… just make sure if your back end buyer falls through you plan to commit and that your spread allows for hard money interest and points.
Also maybe get a P&S agreement from the back end buyer with no contingencies so they cannot back out of the deal.
Or maybe have them go on title with you into escrow and show THEIR POF and have them pay you in a private transaction to back out of the contract before closing and they stay on and fund it… and make sure they put down the initial deposit required. :halo Just In Case.
Just an idea.