25:1 Needing Some Questions Answered

Hey PRivers911,

The proof of funds is actually a letter that you can get from a "transactional funding" company. You can Google "transactional funding companies" and see what you come up with. Here's a link to one to start with:

http://coastal-funding.com/index.html

As I'm just a beginning investor myself, I'm going to add that I hope this helps. However, I'm sure there are much more experienced investors here that can guide you in the right direction on the earnest money issue.

Good luck!

Thanks I appreciate you taking the time to reply. I was under the assumption that transactional funding was only available when doing a double closing.

I don't think it's not gonna cost that much or you might find a good transaction funding company to get you a free pof letter ~ just make sure you find a reputable one. I've heard some scary things about coastal funding. The last thing you need is a funding company giving you the run-a-round and telling the verifiers they don't have a clue what you're talking about, never heard of you, etc. But, transactional funding is available for just about every transaction. Keep in mind, if you use them, their fees will come out off your profit at closing, and they vary but they're reasonable. It's mostly used on bank reo property, where there are seasoning issues or where they don't like when people try to use and/or assigns in the purchase agreement.

As far as the em goes, you'll attach a blank copy of a check for $500 em. It doesn't make business sense for you to send a em check with each offer, as you've got it tied up in other things. They just want to know you're a real buyer, that's all. I believe Matt and Dean went over this on a training once. I think the video you need to watch is here:

http://www.edgelivecast.com/watch/replay/

As a seller, how MOTIVATED are they?

Hi, the link Christopher gave you is for proof of funds (Coastal)...check out their fees (and figure that into your deal..you ONLY pay if you go to close. Also, find your END BUYER NOW! Then you assign the deal to them, and collect your wholesaler fee. (either at the double close, or you can arrange to have the buyer write you a check outside of the closing). I believe in one of the threads Carol Stinson stated she's done it that way a time or two. ~Good Luck!

Hi, the link Christopher gave you is for proof of funds (Coastal)...check out their fees (and figure that into your deal..you ONLY pay if you go to close. Also, find your END BUYER NOW! Then you assign the deal to them, and collect your wholesaler fee. (either at the double close, or you can arrange to have the buyer write you a check outside of the closing). Just have two separate contracts for yourself. One with the seller. One with you and the end buyer. I believe in one of the threads Carol Stinson stated she's done it that way a time or two. ~Good Luck!

PS. Try FSBO's they are easier to start with (there's no agent involved)...

My pleasure!

Also, in further, researching the subject myself, I found a brief thread that may give you some more insight concerning transactional funding companies. One of the posts also mentioned an alternative to Coastal.

Here's the link:

http://www.deangraziosi.com/real-estate-forums/contracts-and-offers/1124...

Thanks so much for taking the time to answer guys. I've been on this site for years but never really got into posting things. I never knew how truly helpful you guys are. Thanks again.

Thx thishousebuyer so much for posting the livecast w/Matt & Dean again that was awesome but this is w/drives me crazy, I thought we are supposed to just offer a % of asking price say 70% & make 25 offers on vacants, as is & price reduced & 25 of them w/get us 1 deal but some coaches on the advisory line are saying not to do that but to analyze or run comp's first but Im confused how would you run comp's on every deal if your doing 25 a wk & they are all spread out. Help

I just watched Matt speak at the 2011 Edge event on video. When he was discussing his strategy he also mentioned several times that he believed that students should pay their dues when they are first starting out.

The curriculum we teach to students is designed to reach an MOA (maximum offer amount) by starting with an ARV (after repair value) and then subtracting out investor costs and profit and then your costs and profit to arrive at an MOA.

During the video Matt mentions starting offers at 40-50% of asking price as a starting point. He also mentions other ratios in the video. At 40-50% of asking rate most deals should have plenty of profit in them. At 65-70% of asking rate when the asking rate may or may not be close to the ARV there might not be plenty of profit in the deal. The only issue with making offers based on asking price is that asking price is not indicative of value at all.

Matt is experienced at understanding asking prices and their relative value within a market due to the sheer number of deals he has done. A new student might not be as aware or experienced as Matt currently is. That's why we suggest getting comps to arrive at an ARV when you are first using the system. When we get a student who is just starting out we try to get them to use training wheels and start by using our offer calculation formulas to find MOA's and use that as their offer ceiling knowing this gives them the best chance to get a deal done (by ensuring their is ample profit in the deal) if they get one under contract. It's not so much a different system or contradiction as a reflection of experience.

To answer your question about not being able to pay for a POF letter, Coastal Funding does not charge anything for the letter itself. You simply go out there and put in your property address and the price you are offering (no more, no less) and you will instantly get your POF letter to print out. If the offer is accepted and you actually use coastal funding, of course they take their fee out of your profit. Hope this helps.
shirley