So you’ve finally found a house that is ripe for a flip. Congratulations! But, now, you may be wondering—what do I do next?
One of the first steps in your journey to flipping success is to secure the property. Unless you are negotiating directly with the homeowner, that means you’ll need to furnish a proof of funds (POF) letter.
What is a proof of funds, you may ask?
It is basically a letter from a third party vouching for the fact that you have access to sufficient funds to actually purchase the property. That makes sense, right? The homeowner and their real estate agent or broker want to make sure that you are a serious buyer.
Where can you get a proof of funds letter?
Here you have several options, and it all comes down to where you plan to secure financing. If you are planning to self-finance the deal, then a copy of your bank statement may suffice as your proof of funds. Of course it goes without saying that you’ll need to have enough money in the account to cover the entire cost of the property. Since this isn’t a viable course of action for everyone, consider obtaining some leverage.
If you already know where you will secure financing for the project, then that entity should be able to provide a letter to you. If you’re considering a hard money lender, you should be aware that many will only provide a generic letter, if they provide one at all. Some will even charge a fee for the POF. There’s a reason they call it hard money.
Here at Navigator Private Capital, we have a different philosophy. We do what we can do make the loan application and approval process as easy and straightforward as possible. As a private lender, NavCap offers our clients the ability to generate a customized proof of funds letter directly from our website. Once you sign up as a member on our site, you are able to print a proof of funds tailored to your offer by providing basic information about the location and sales price of the property. Presenting this letter along with your sales contract provides the seller with the assurance that you can put your money where your mouth is.
Of course, the proof of funds letter is a non-binding document since actual loan approval will depend on many things including an acceptable appraised value and mutually agreeable terms. Our clients can fill out a full application and submit all of the required documentation right on our website to generate a more specific conditional loan approval. It’s that simple.
Questions? As always, we here at NavCap are ready and willing to help you anyway we can. Reach out to us at 443.603.0193 or via email at:
Tim Boord: tim@gonavcap.com
Rick Rall: rick@gonavcap.com