Protecting My Interests/ Proof of Funds

[Jeremy Jones]

Hey guys, I'm just starting out into real estate and wholesaling is the entry method I chose to use to get into the game and learn all about the market, the lingo, the bylaws etc...so I've been learning from Youtube and talking to licensed agents that I know for a little over 2 months now. I recently bought Propstream and so far its been very useful. I actually was able to find an on-market property and the agent is willing to actually work with me or hear my offer at least.

So here lies the problem. I'm meeting with the agent this Saturday to walk the property. I have done some homework on the property from afar and I'd love to have an offer and contract in hand the day I meet with her. The problem is, I know of a cash buyer or two that might be willing to take the deal but I'm pretty sure the agent will want a proof of funds letter upon me offering the contract yes? So if she does ask for it and decides to not accept the offer until I can prove that I have the funds, how do I get one from a cash buyer without giving them the address of the property or them wanting to know the address of the property? I'm trying to protect myself to make sure the potential cash buyer just doesn't go behind my back and cut me out of the deal completely. You know, since I won't have the property under contract to protect my interests in the deal.

This could possibly be my first wholesale deal.  Just trying to limit as many mistakes as I can early on. Thanks guys.

[Will Barnard]

Not to add coal to the fire but there are several things wrong with your scenario. First, wholesaling a deal from the MLS is no easy task and not where you should be focused. Second, you have stated that this property has been on the MLS for some time which means it is clearly overpriced, the fact that the agent is willing to work with you knowing you are a wholesaler is just out of their own desire to get a commission. if they were really doing their job, they would have made adjustments to the listing (with seller's permission) as no property in this highly competitive sellers market should sit for very long.

As far as protecting your interests, you are likely going about this wrong. If you have a cash buyer, then you should make an agreement with that buyer in writing to get paid for locating deals for this person. The best way to do that is to form a new entity naming you and your buyer as owners. Then the "partner" can provide a POF for you on all offers until you get one accepted. Once accepted, you go into escrow and sell your shares to the cash buyer for your fee. No violation of brokering laws, no double closings needed, etc.

That all said, this property is likely not a deal until the price is negotiated well under ask and I say this without knowing the market there, the list price, or the current value. But clearly it is overpriced if it has been on the MLS for an extended period of time. Price overcomes ALL objections.