Keep Your Deal Moving Forward With A Hard Money Lender’s Proof Of Funds Letter


Many real estate investors eventually run into a seller, or a seller’s representative, who will suddenly pull a Jerry Maguire, exclaiming, “Show me the money!” They won’t let you put the property under contract or consider your offer until you give them a proof of funds letter. What is it? How will you get one? How can you satisfy your Jerry Maguire?

What Is A Proof Of Funds Letter?

As the name implies, a proof of funds letter tells the seller that you actually have the money—and in the seller’s mind, this is a way to show that you are serious and prepared to move forward (and not just a “tire kicker”).

When Do You Need A Proof Of Funds Letter?

When you do encounter a request for a proof of funds letter, it can stop the project cold in its tracks because the seller (or their agent) won’t consider your offer until you produce a proof of funds letter. It also happens if you find a bank-owned house. Even some sellers may require it, feeling like they need assurance. Another time you might encounter this is when you’re syndicating a larger deal, maybe trying to buy a multi-family property or an apartment complex and the seller wants to see a proof of funds letter to know if you are serious. Sometimes rehabbers will run into wholesalers also demanding a proof of funds letter. You’ll run into sellers who just don’t want to turn away any other interested parties unless they’re certain they have a deal that will close with you.

What Is A Hard Money Lender’s Proof Of Funds Letter?

If you’re facing a “Show me the money!” situation, a hard money lender’s proof of funds letter is essential to moving ahead on that deal quickly. A proof of funds letter is your personalized statement that shows that a hard money lender has set aside the funds for your real estate investment.

How Do You Get A Hard Money Lender’s Proof Of Funds Letter?

So, how do you get a hard money lender’s proof of funds letter? It starts by finding a hard money lender and building a relationship with them. Tell them about your investing business in general, and about your deals. Then, when you have a deal that requires a hard money lender’s proof of funds letter, go to your hard money lender and ask. (Depending on the situation, you may not be obligated to borrow that amount but it’s a tool for you to use to the seller so they know that the funds are available.)

The bottom line is: a hard money lender is a valuable asset even if you don’t need the money. A hard money lender proof of funds letter is your quick and easy way to keep that deal moving forward. They can help you prove that there is money available should you need it. It all starts with a relationship with a hard money lender.

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