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I write a lot about raising money from others, especially as a way to get started with multifamily investing even if you don’t have your own cash or good credit.

The challenge is that if you’re raising money, chances are that you don’t have the net worth or liquidity to satisfy a seller’s request for proof of funds. As a syndicator, you don’t already have the funds sitting in a bank account. You’re going to raise it from others and deposit the money into an escrow account for closing. But you don’t have it right now.

This can be a real challenge to get a seller to ratify a contract with you. It’s not uncommon for the broker and/or seller to want see proof of funds. This is a real problem that you need to know how to address, and many sellers won't accept your contract, even if you offer an outrageous price.

The underlying issue, of course, is that the seller doesn't really believe you can actually close on the property. This is why they want to see proof of funds.

While showing him actual proof of funds would certainly satisfy the seller, there are other things you can do instead. Here are 3 tips you can follow when you get the request to show proof of funds.

Read the complete article on BiggerPockets here.


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