Proof of Funds for Private money / Realtor commissions

[Aaron Brown]

Hey BP family, 

I would love to hear some feedback on POF for private money deals and realtor commissions on off market deals you found and negotiated yourself.

What do you typically use for proof of funds to submit an offer if you are borrowing from an investor? 

Also, what are your thoughts on realtor commissions for the listing agent on deals you found yourself? Do you still pay full commission? Or do you expect a discount? 

All feedback is welcomed and appreciated! 

[Will Barnard]

Quote from @Charles Carillo:

@Aaron Brown

Typically, the HML will have a pre-approval letter that you can submit with offers. If there are any questions about the down payment; you can provide a copy of your bank statement.

As is so common, this is another case of mixing a hard money lender with a private money lender. Two different things, like lemons and limes.

For your POF, you should ask your PML if they would be willing to allow you to use their bank statement for your offer. Delete the account number of course. If the agent or seller questions the name on the POF, a simple explanation that you are using partner money should suffice. Ultimately, that is what your private money lender is, only their partnership is debt and not equity in most, but not all cases.
For me, I have used my own POF but still use private money to fund my deals as I have often had many on the books at once. If you are using private money and making your offer with “all cash”, somewhere in your purchase and sales agreement it should specify that you intend to record a deed of trust in escrow using private funds which are to not have any additional contingencies or lender approvals.