Proof Of Funds In A Short Sale
How can you present to a bank proof of funds in a short sale package, when you intend to double close using an end buyers money? I would like to flip short sales to investor/rehabbers, and it is my understanding that banks wont go for an assignment of the purchase contract. Also, at what stage of the short sale process do you line up your end buyers? is this something that is done prior to submitting the short sales package? thanks for your input.
eric
RedTBoa:
Nice to meet you!
Under the above example you gave I'd simply tell the Bank that it's going to be an ALL CA$H Transaction!
And B/C I normally PRE-SELL deals like this I would have already gone to a pool of rehabber and/or contractor buyers (from my Fixers Buyer's List) to come to the table ALL CASH visa via an Assignmnt of Beneficial Interest in the Trust I set up for my flip deals!
I get the rehabber buyer to agree to a buy-in price on the home (with my profit included.)
B/C I have already educated those on my 'fixer buyers list' on WHY I use Trusts to Acquire Property and also how+why IT CAN BENEFIT THEM to avoid double closing costs + seasoning issues(on FSBOs & PFLs).
When it comes time for the '123 Main St. Trust' to PAY the BANK...I have the escrow/title Agent to handle FUNDS from my rehabber buyer (less my Profit)
They get and Assignment of Beneficial Interest in theTrust and/or Trusteeship by my assigning/substituting these with the escrow/title officer.
Not as difficult nor as involved as it sounds but pretty effective and PROFITABLE!
Hope this helps!
Derrick
...I have in the past had brokers due a Proof of Funds letter for me subject to the lender's final approval. It has always satisfied the requesting banks criteria. Good Luck!
Quote:
On 2003-11-30 12:58, jonesoe30 wrote:
...I have in the past had brokers due a Proof of Funds letter for me subject to the lender's final approval. It has always satisfied the requesting banks criteria. Good Luck!
Can you explain more please?
What do you mean the broker does a Proof of Funds letter?
You mean they say you have the funds without you showing them a bank statement?
Thank you.
Can you explain more please?
What do you mean the broker does a Proof of Funds letter?
You mean they say you have the funds without you showing them a bank statement?
Thank you.
[/quote]
Mr. Mike -
What I mean is that I usually have the broker/lender write a letter on my behalf stating that the funds will become available subject to the financing's final approval. So basically the proof of funds letter from my broker/lender on his letterhead with his POC info and his signature is my bank statement. Like I said before, I have used this method doing shortsales and the proof of funds letter was always suffice. I've never had to show them my bank statements. Hope this helps.
i do understand that a broker can supply the proof of funds letter if you plan on using their loan to buy the property, however what if it is your intentions to flip the property to another private investor or rehabber, using their money to fund the transaction? i know the bank doesnt want to see you making a profit and that is why they wont accept assignments in the purchase contract.