How to ask for proof of funds from prospective buyers.
Quick question, aside from a confidentiality statement, what’s the best way to request proof of funds before providing any financials for a property?


We are preparing a 150 single family portfolio to market, and want to make sure we are only providing financials to people/groups who are essentially qualified to purchase the package.  


I.e.  I don’t want to provide Joe Blow investor who buys single doors when he’s in no position to buy a $5.6 mill portfolio.        We will be using a CA,  but want to add another layer and essential pre qualify anyone requesting the financials.
[{"id": "g3raxw4", "text": "Just simply request proof of funds.  Prospective buyers are going to provide it in whatever format they feel suitable.\n\nI've provided redacted copies of bank/investment account statements before.  I've also provided personal financial statements of the type I'd give to a bank for a commercial mortgage.  If it's good enough for a commercial bank, it should be good enough for you as a seller.", "replies": [{"id": "g3rz56a", "text": "This is standard, you just ask for it. If there is serious interest they'll turn in something that is at least strong enough to get the conversation going. No need to be coy.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g3rf0rl", "text": "Wouldn't you already have access to a list of qualified buyers you could send this to?", "replies": [], "depth": 1}, {"id": "g3rl8jj", "text": "EMD, POF( major lender, no internet preapproval). Application.\n\nI have a business for sale as a middle person. I kept seen letters demanding sales records from last 3 years etc. Even if the sales are available w/o pof, NDA, why should the seller show tax returns w/o getting info from prospectors?  You show me yours I will show  you what you need to know. You call no return calls.", "replies": [], "depth": 1}, {"id": "g3rva4a", "text": "I have clients who do not like to give proof of funds due to privacy and cultural issues. The way I work around it is that I pre-approve them for an eventual offer with a bank. Anyways, I rarely see anyone asking for one with an OM. Usually I would ask or give it with an LOI.", "replies": [], "depth": 1}, {"id": "g3rzc3a", "text": "\" Can you please provide proof of funds for my (seller, partner, whatever), thank you.\"", "replies": [], "depth": 1}, {"id": "g3s2vpy", "text": "Just have them sign a Non-Disclosure Agreement. Have an attorney prepare one, or ask your bank for a template.", "replies": [], "depth": 1}, {"id": "g3s5kgf", "text": "Add \"PROOF OF FUNDS REQUIRED\" to the offering memo.  Whoever is handling the project will have to enforce this before getting any interest to you.  Also, your first buyer targets should be the institutional buyers or private investors with a history and reputation for buying  at this scale.  It's the 1031 guy who may be getting in over his head that I'd be worried about.  Just because he may have the money doesn't mean he understands HOW to buy this portfolio.   You don't want to be a teacher.", "replies": [], "depth": 1}, {"id": "g3vfven", "text": "Along with the confidentially agreement and NDA, what other stuff do you ask for?  I would simply add the proof of funds in the list of items that you require to proceed.  You don't have to call out too much attention to it by singling it out but you also don't have to be that clever or hidden about asking about it.  If they have they have the money and the deal is a good deal, they will do the deal.  If they don't, they won't. \n\nI'll also add that by just asking for it upfront, you will likely weed out anyone who is fake.  Is there a reason you don't want to ask for it more directly?  I don't think anyone with the funds would be offended you're asking for it.  And, if they can't generate it or they are working to broker, they are wasting your time.  You want to work with the people that have the money.  Ask for evidence of the money.  \n\nGood luck!! \n\n\\-HYDE", "replies": [], "depth": 1}, {"id": "g3w73x5", "text": "It really depends where you are and who you are dealing with, I work mainly with manhattan landlord families who are very quiet, I've had instances where they will send a link of a traded post, and if that's not good enough they will move on.", "replies": [], "depth": 1}, {"id": "g54cig6", "text": "This is a interesting subject and there a number of perspectives depending on which segment of the market, asset class and location. \nMy family and I are invested in the multi family space with a typical asset size of 200+ units and I will share my perspective:\nIn my experience, when someone brings us a deal and asks for proof of funds, it tells me that they aren\u2019t experienced professionals and more often than not are a broker who doesn\u2019t  actually have access to the deal and needs my credentials to get access, so we do not send proof of funds. \nYou should be able to discern who is qualified buyer by speaking and meeting with them, do they \u201cspeak the language\u201d? Are they are asking the right questions and can speak to other assets they own or have owned?\n\nNow I have had situations where I was dealing directly with the owner of a one off property (typically inherited) and otherwise do not know the business, in those scenarios, once I have confirmed that I am speaking with the owner and decision maker, I have then had my attorney speak to their attorney and pass along proof of funds in the form of bank statements showing average balances with a blanked out account number and/or a statement from our accountant. Although I have been in those situations a few times, I can only recall one time that we actually had to send over documentation.", "replies": [], "depth": 1}]