Proof of funds when making an offer

[Ryan Gillis]

I have received mixed information on this. I am wondering how you guys are writing your cash offers on REO's and shortsales regarding proof of funds. I'm planning on using a combination of hard money and private investors for gap funds. I have these squared away, but I need to know how people are writing the most successful offers, specifically in California, if possible.

I've heard that some people submit a bank account statement from a "proof of funds person" and depending on who you talk to, add them to the contract or they don't but add a "gift letter" with the bank statement. I have a couple people that I can use for proof of funds in a cash offer, but they would likely be not be interested in signing all the paperwork for each offer we submit and/or follow to close. They would also be leery of any risk involved with being on the offer. The plan would be to deed the property over to our corporation at close.

I've also heard that some investors are writing offers with a clause reserving the right to use hard money and that some are simply telling the bank that they are switching to hard money right before escrow (without having the clause in the offer).

I'm looking for some help to clear this up and get some good feedback on what is working for you guys (again, preferably in CA, but open to hear posters from anywhere).

Thanks!

[Jon Holdman]

Hard money is a loan, not cash. If you want to make cash offers, submit a bank statement from the same person or entity making the offer showing funds to close the deal and a check for 10% of the offer. Otherwise just admit its financed and submit a pre-approval letter with your offer.