First of all let me say hi to everyone. First time poster long time reader. I’ve been playing with the idea to get into real estate for about 6 months and finally want to take the plunge. I want to start in wholesaling and I’m delving into two routes: 1. Finding ugly houses and making offers to owners and 2. finding a realtor to find me some deals. By the way I’m from New Jersey. I’ve talked to a few realtors and they all require proof of funds before I can make offers. How do I get proof of funds? what can I use? I’m 24 years old, dont have much in the bank, and dont make that much in my current job. One thing I can think of is possibly using my father’s 401K statement since we both have the name but he doesnt have much in there (less than $50,000 because he took a good amount out to buy a house a few years ago). Another thing I can think of is possible getting pre-approved from a Hard Money Lender then they can send a letter to the realtor. I’ll just make sure not to actually borrow any money from the HML to do any flips. So is there any other way I can get proof of funds in my situation?
ID THEFT IS AGAINST THE LAW!
Using your fathers 401K because you have the same name is identity theft. I’m sure he’d hit the fan when he found out! Thats a good way to go isn’t it? I can’t believe you would even post a question like this! You would be the last person I would want to deal with!
It would be better to build up your credit and net worth to at least some kind of stable level. You are not ready to get into real estate investing if you are thinking about cheating to do it. It is also FRAUD to provide a financial lender with false documents which mislead or misrepresent who you are, what your assets are or what your income is. About the same as providing false tax returns to verify income to recieve a loan under false pretenses. These are all FELONIES and have severe penelties and prison time.
Cheaters make us all look bad and thats why more and more real estate brokers and realtors are asking for proof of funds, because it weeds out the people that don’t have money but want to tie up property and run them around for usually nothing in the end.
This is part of the reason North Carolina is trying to pass BILL 725. Because all these so called investors and flippers are causing havoc in the real estate industry. If BILL 725 passes, The Real Estate Investment Industry will be available to only big time players. All Due on Sale clauses will be called, no more rent to own, or rent with option to buy homes in North Carolina. Hope it doesn’t pass but we need people to be credible and ethical in their REI businesses.
The first step to “real” real estate investing is having the funds in place so you can follow through in the end. After all a contract is a contract. It shouldn’t be a way to tie someones property up just so you can run everyone around while you try to find a buyer. If you say you intend to buy a property, then be ready to buy it.
You can’t hold a car for 30 days and then decide you don’t want it and opt out of the deal with nothing to lose, why do people think its alright to do houses like this?
What are ya thinkin???
If you don’t want to use a HML then get a better job and save some money. Work 2 jobs to get extra money…save it for investing.
In 3-4-5 years you will have some of your own money to use and you can call your own shots instead of trying to “play” at it.
There are other ways to get into real estate without having to have a pile of money, you can start with just a few thousand dollars but your not going to make $50K overnight. You gotta start small like most people do.
Everyone has this crazy notion you can get rich without any risk, any money, and most people that think every deal will be like that is just thinking crazy. There is risk in everything you do. Who is going to loan money to someone who has bad credit, no money, no assets and no plan? Not many, not even HML. If they do the interest will be so high that you would just about have to get the house for free to make a profit for yourself. The only other way is to find a partner with money and let them in on the profits…and they will call the shots because they have the money…not you! You could find private investors but why should they loan money to you when they could loan money to smeone with a written plan and maybe some experience?
What is your credit like? You may be able to get 100% financing if you have a 580 or above. Then you may or may not have to come up with some closing cost money. It all depends on what your credit looks like. Once approved you can get a pre-qual letter to show the realtors to get things rolling.
Find a local HML and aks them for a “pre-Qual letter”.
The Realtor is probably just referring to a pre-approval letter from a lender. That would be proof of funds, proof that you have financing lined up. Most sellers will be looking for a pre-approval letter submitted with the offer on a traditional real estate deal.