Do I Really Need a Proof of Funds Letter?
Many brand new investors have recently come to us with the same question:
What is a proof of funds letter and do I really need one?
Do Hard Money is here to answer all of your real estate investment questions, no matter how big or small. So, never fear! We’ll walk you through all of the ins and outs regarding proof of funds letters and if they’re needed in real estate transactions.
Proof of Funds Letter
A proof of funds letter is a document given to a real estate investor from a hard money lender. It verifies and provides proof to a home seller that the investor has funds available to purchase their property. Basically, it shows the seller you have financing set in place to buy the property right away.
Is It Necessary?
To explain the importance of proof of funds letters, we like to use the cowboy analogy. Suppose you’re driving around with your big cowboy hat on and putting down offers on multiple properties. There will come a time when the seller, whether it’s a bank, an asset manager or a private seller, will say “You’ve got a pretty big hat there, cowboy. Let’s see if you have any cattle. Take me back to the ranch, I want to see what you’ve really got.” Basically, the seller will always want to see proof behind your claims for funding. This is why a proof of funds letter is absolutely necessary. It shows you have the financial goods to back up your offers.
How Do I Get a Proof of Funds Letter?
Unless you have cold, hard cash lining your pocket for an offer on a house, you need a proof of funds letter to show the seller that you mean business. Fortunately, Do Hard Money has a proof of funds letter that you can download instantaneously.
When you fund a deal with us, you immediately gain access to unlimited proof of funds letters which you can download at any time. In the member’s section at dohardmoney.com, you’ll see a menu called “tools and resources.” Then, you will click “proof of funds” in the drop-down menu. All you have to do is enter your first name, last name and email address. Then, you’ll enter information on the property, such as the property address, city, state and zip code. Finally, you’ll enter the anticipated property purchase price. After you enter this information, you’ll instantly receive your proof of funds!
What Does Do Hard Money Have to Offer?
Do Hard Money is one of the few hard money lenders which offer unlimited proof of funds letters. These letters allow you to put in solid offers on properties, ahead of the competition. Your personalized proof of funds letter is typed up and signed in a PDF document, straight from our portfolio manager. It verifies we have set aside the funds for your transaction. It also states once your property goes under contract, we will provide funding within a short time frame. You can download as many proof of funds letters as you want, as many times as you want, at any time and from anywhere.
What Happens When I Download the Proof of Funds Letter?
When you download a proof of funds letter, it actually logs it into our computer system and records that you have proof of funds for that property. The seller can then call our office and inquire about your offer. We can then verify that you indeed have the funding ready to go. Once the property goes under contract, we send out independent evaluators to inspect the property site. Then, the deal is finalized!
Things to Keep in Mind BEFORE Requesting Funding & Proof of Funds Letters…
There are a few questions you need to ask yourself before you apply for funding. These questions are similar to those presented in our Advanced Deal Analyzer, our house flipping calculator tool. They ensure you don’t waste any time on a bad deal which won’t qualify for funding or proof of funds:
- Is this proof of funds on an owner-occupied property? – If there are renters or owners living in the home at the time of closing, we cannot fund the deal. This is because it opens both you and us up to additional liabilities.
- Is this proof of funds for a loan on anything other than a single-family home? – Our investing experience over the past decade shows us that single-family homes are the best and most consistent investment vehicle, especially for newer investors.
- Is this loan for a commercial property? – These tend to be riskier and more complicated investments and are better suited for advanced and more experienced investors.
- Is this loan for raw land or is the loan over $250,000? – Do Hard Money doesn’t typically lend on raw land or offer loans greater than $250k.
- Are you currently in open or active bankruptcy?
- Do you have pending or current foreclosures?
- Do you have unpaid, pending or threatening judgments?
- Do you have any collections or charge-offs greater than $2,000?
- Do you have any unpaid state or federal tax liens?
It’s absolutely essential to answer these questions honestly, as they may impact the fundability of your loan.
Do Hard Money Is Here to Help!
In addition to providing unlimited, 24/7 access to proof of funds letters, Do Hard Money also gives a wealth of real estate investment tools and resources to our clients. Access to these resources are free to those who enroll in 100% financing.
Ready to get started? Just click on this link to schedule your appointment with our investment associates. We can help you start right away on the path to financial freedom. With Do Hard Money, you can achieve high profits and make multiple offers to further build your profit portfolio!
Do you already have a property in mind? Great! Just click on the yellow ‘GET PRE-QUALIFIED’ box on the right and fill in the fields to receive funding fast!
To get in touch with us quickly, give us a call at 801.948.9774. Don’t hesitate! The real estate market is more profitable than ever. Schedule your appointment today!