Newbie Investor

[Account Closed]

Hi BP,

I recently started a real estate investment company in Baltimore, Maryland. I'm familiar and have experience with wholesaling properties. I was looking to expand into buying properties to rent out and properties to fix and flip.

I just came across a property in a decent neighborhood that appears to be a good deal for a quick fix and flip. The investor is requesting a POF letter and a signed disclosure form before I can even go take a look at the property to make a thorough assessment. This is a first for me. Is it common for an investor to request this upfront even before allowing people to view the property?

Also, I ran across a HML that provided me with a pre-qualification letter but states that it will provide "unlimited" POF letters for $49.95/month. Is it normal for a HML to charge and provide "unlimited" POF letters? Is it a good idea to pay this $49.95 monthly fee?

Lastly. I recently bought a home as my primary residence with FHA lending. Will I run into problems now that I'm trying to get financing approval for an investment property since I just closed on my home a few weeks ago? Should I wait for a few months before trying to buy an investment property?

Thanks,

LaToyia

[Ned Carey]

Yes some will ask. The disclosure is more of a red flag to me. What kind of disclosure, for what? 

Personally I think an experienced in investor can simply screen most buyers to see if they have funds to buy, by simply asking a few questions. I might ask for proof of funds only if I am already suspect.

So a question to ask yourself is did you send off signals that made the investor want these documents or is the investor a flake for wanting them?

I wouldn't pay for a proof of funds letter. Generic ones will probably be spotted as a fake anyway.  If it is  a good deal run it by a hard money lender. They are a good way to screen out bad deals as they will not fund them. This can keep you out of trouble.