Tim Bell funding your deals 1

Okay, so now we're going to talk about funding. Today we're going to talk about funding your wholesale deals, your fix and flip deals, and your buy and hold deals. Again, funding can be an important part of your business. Obviously wholesale, it's not quite as important. But fix and flip and buy and hold, it certainly can be important. So we're going to talk about funding for all three exit strategies. Okay, so let's talk about that. But first, before we do, I want to talk about something called a proof of funds letter. A proof of funds letter is an indication from a lender that they believe that you can qualify or that they will have funding that is available for you. Okay. That's what a proof of funds letter is. A proof of funds letter might look like this. This is a proof of funds letter from a company that I recommend you consider using. And that company is called Plan D Investments. Basically, you can see here that we've got this funding letter here from these folks. And I'll make it a little bit bigger so you can see it here. A proof of funds letter is essentially a game that we play with real estate agents and with sellers. Proof of funds letters are very vague. In most cases. They have a lot of caveats, a lot of if then this and if then this. And basically it's something that we submit to an agent or a seller to indicate that we do have funding available for that particular deal. Now, I like using this company's proof of funds letter because they provide it for free. You can see here that it says plan D Investments, llc, private funding for your investments. And it lists their address and phone number. It says, proof of funds, February 14, 2017. Regarding the property at 608 King street in Pottstown, Pennsylvania. Do may concern this is to inform you that Plan D Investment is a private lender has reviewed the information provided and is pleased to notify you on behalf of Wealth Investment Strategies. That's a company investment company. Unencumbered liquid funds are available to close in the above reference property for the Purchase price of $125,000 as of the date of this letter. So basically what they're saying is that they do have funding available. Now, they're not guaranteeing they're going to provide this company funding. They're not going to guarantee that they're going to fund this particular purchase of this property, but they're saying that there is funds available. Okay. In many cases. Well, in some cases, real estate agents are going to ask you for this proof of funds letter. It's Like I say, it's a game. It's a dance. Just play the game, dance the dance. Give them the proof of funds letter. I'm going to show you how to do that in just a minute here. As it says here, should you have any questions, please feel free to call us. And there's a telephone number there. Yours truly, August Gaducos, the funding department, Plan D Investment. And there's a telephone number there. So again, this is a proof of funds letter that will suffice for most circumstances in your real estate investment business. I do recommend that if you're making the offer to a real estate agent or through a real estate agent that you do automatically, without even being asked, give them the proof of funds letter. Now let me show you how to get that proof of funds letter. We go back here to their website. Their website, Plan D Investments website is called best transaction funding dot com. You can see it on your screen here. Best transaction funding dot com. And if you go right underneath the gold house with all the money falling all over it, you can see there's some drop downs there. The dropdowns you go down to is proof of funds. Click on proof of funds. You scroll down there and you can see in the middle of the page there, there's what the computer people call a hyperlink where you can click on that and it will take you to an application for a proof of funds letter. You fill it out. Name, first name, last name, company name, telephone number, email address, property type, is it residential or is it commercial property? Address, city, state, zip, how much you're going to offer for the property, and do you want your letter to be in your name, your company name or the company name and your name together? Okay, you can get those choices. You come down to the very bottom. You click on the I have read and accepted the disclosures box, whether or not you have read and accepted disclosures. And then you click on the little red submit button down at the bottom there. The little red submit button will then submit this information. Now this is what is called an autoresponder. An autoresponder means that this information is never touched or seen or handled in any way by a human being. It's basically just your computer communicating with their computer, just sharing information and transferring information back and forth between your computer and their computer. That's how it works. Now again, when you send this in, they're going to send you back on the email. That proof of funds letter that I showed you, they're going to send that to you so that you can have that to use and so that you can submit that to the real estate agent or to the seller along with your offer. Okay. Again, you may or may not get funding from plan D investments, but it really doesn't matter where you get your funding from. The proof of funds letter basically just indicates that you do have funding available. And that's really all the seller and the seller's agent typically want to know is that you do have funding available. So you may not use them, but you could use them. But at any rate, you're playing the game. You're dancing the dance of giving them the proof of funds letter, and it will suffice to demonstrate that indeed you do have access to money and you have that available. So again, that's an important concept that you want to think about, an important thing that you need to do do in your business. Again, my rule of thumb is if I'm working with a real estate agent and I want to make an offer on a property, I'm going to automatically give them one of those proof of funds letters. Now, a lot of people say, wait a minute, Tim, how long does it take to get this proof of funds letter? Well, I timed it one time, and it was 2 minutes and 21 seconds. So that's how long it takes. It's basically the computers going back and forth with one another. It should happen faster than that. Why? Because. Because Electricity travels at 186,000 miles per second speed of light, but it has to go through computers and servers and fiber optic lines and a bunch of other different stuff. So it takes a couple of minutes. Always get a proof of funds letter on a property that is listed with an agent and submit it automatically without being asked. Because if you'll do that, that will prevent you from having to have a difficult conversation with them, which might be, wait a minute, where are you going to get your funding for this? Okay, again, if you can avoid that conversation with a seller and with their agent, you're typically better off. So that's why I recommend automatically sending the proof of funds letter. Now, as an aside, I will tell you that plan D investments in terms of providing funding is a great place to get transactional funding. If you recall, in our discussion of exit strategies for wholesale deals, transactional funding was our third exit strategy that these folks best transaction funding will provide transactional funding for your your wholesale deal, if indeed you choose to use that exit strategy. Now, I will also tell you that these folks are the least expensive source of transactional funding that I have found. They typically charge 1.75% as a flat fee for the borrowing of that money for the short period of time. One, two, three days, something like that. Plus they're going to charge you a $495 application fee. So here's how the process works. You put the property under contract with the seller. You also put the property under contract with the buyer. In the first contract with the seller, your role is that of the buyer. In the second contract with the buyer, your role is that of the seller. You remember we talked about this. If you need more help with this, go back and review the lesson where we talked about the three exit strategies for wholesaling. So now you have those two contracts. You basically contact these folks at Plan d investments@besttransactionfunding.com you send them a scanned copy of each offer. Each contract. You send them a scanned copy of the contract with the seller and a scanned copy of the completed offer with the buyer. You also then give them your credit card or debit card number, and they hit your credit card or debit card for $495. That's their application fee. They'll look over the two contracts. They make sure that there's a big a difference between what Sam, the seller is agreeing to take and what Bob the buyer is agreeing to pay off. Obviously, there has to be a difference there. That difference, of course, is your wholesale fee. And then once they've determined that there's a difference there and that those two contracts are legitimate, they're all signed and everything, they will wire transfer the money earmarked for your deal with the seller to the designated title company to let them have that money in place, ready to close when you're ready to go. Along with that money comes, as we talked about before, something called escrow instructions. Escrow instructions indicate that. That under what circumstances that money can be released into your transaction with the seller. And basically it says if you and the seller show up and sign and you and the buyer show up and sign and the buyer brings in his money, then and only then will they allow the title company to release their transactional funding money into the deal between you and the seller. So there's no risk for the transactional funding company. I have found this to be a very good transactional funding company. A lot of people like it. Other things you can do, you certainly can do a Google search, an Internet search for transactional funding companies. They're all over the place. They're everywhere. Okay, so as far as funding deals for wholesale, here's where we're at, if you remember and if you paid attention to what we were talking about on the exit strategies. If you're doing an assignment of contract or you're doing a simultaneous close, you don't need any funding. Why assignment of contract? You never owned the property. You're not selling the property. All you're selling is the contract, the contractual right to buy the property. You're selling that paper to the buyer, and then the buyer goes and closes with the seller. Remember that. If you don't, go back and review the exit strategies for wholesale deals. That's the first one we talked about. The second strategy we talked about was a simultaneous close where we have Bob the buyer, who brings in his money, which easily suffices to cover our commitment to Sam the seller. Okay. Again, you don't need any funding on that because Bob's funding suffices to cover our obligation to the seller. Okay? That said, if we go to the third strategy, the third exit strategy for wholesaling, and that would be transactional funding. That's where a company like best transaction funding, Plan D investments, whatever you want to call it, that's where they would come in to provide that temporary funding for you. Again, if this is unclear or you're uncertain about how this works, go back and review the section on wholesale exit strategies that we talked about in an earlier lesson. Okay?