What Is A Proof Of Funds Letter In Real Estate & When Do You Need One?

When getting started in real estate investing, sellers need proof you’re serious and able to close. A mortgage preapproval shows a lender’s confidence in you—but cash offers usually require a proof of funds letter.

A proof of funds letter in real estate is a short statement from a bank or lender confirming you have liquid funds available. It gives your offer instant credibility, speeds up negotiations, and can win deals in competitive markets. Below, you’ll find a sample proof of funds letter and the key elements it should include.

Let’s break down what POF letters are below, why they matter, and how they differ from other financial documents—so you can submit stronger offers with confidence:

• What Is A Proof Of Funds Letter In Real Estate?
• Proof of Funds Letter Vs. Preapproval
• When Is A Proof of Funds Letter Required In Real Estate?
• Is A Proof Of Funds Needed For A Cash Offer?
• What Exactly Should A Proof Of Funds Letter Say?
• How To Get Proof of Funds From A Cash Buyer Investor
• How To Get A Proof Of Funds Letter From A Hard Money Lender
• Final Thoughts

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What Is A Proof Of Funds Letter In Real Estate?

A proof of funds letter (POF) is a short statement (usually on bank or lender letterhead) confirming you have sufficient liquid money available to close. Sellers and listing agents use it to verify that a buyer (or buying entity) can complete a cash purchase or cover required funds at closing.

What a proof of funds letter typically includes:

• Buyer or entity name (matching the offer/contract)
• Financial institution name, address, and contact info
• Date of issuance (ideally within the last 30 days)
• Available balance (or credit line amount if applicable)
• Statement that funds are liquid and available for closing
• Signature from an authorized representative

Acceptable forms: An official letter on letterhead is standard, but recent bank or brokerage statements (with sensitive details redacted) or a letter from a hard-money/bridge lender may also be accepted by some sellers.

Read Also: Real Estate Financing: The 6 Best Funding Options For Investors 

Proof of Funds Letter Vs. Preapproval

A proof of funds letter confirms you have liquid cash available now to close; a mortgage preapproval confirms a lender is willing to finance you up to a certain amount. Sellers often want both, but the POF carries the most weight for cash offers and fast timelines.

 

Proof of Funds vs. Preapproval (Quick Comparison)

Aspect	Proof of Funds Letter	Preapproval Letter
Purpose	Verifies liquid funds on hand	Shows lender’s willingness to lend
Issuer	Bank, brokerage, or private lender	Mortgage lender
Shows	Available balance/credit line	Estimated loan amount & conditions
Best for	Cash offers, auctions, quick closes	Financed purchases
Shelf life	Typically ≤ 30 days	Typically 60–90 days

 

Preapproval Letter (What It Means)

• Issued by a mortgage lender after reviewing credit, income, debts, and docs.
• Signals you likely qualify for financing, but it is not a final loan approval.

Proof of Funds Letter (What It Means)

• Issued on institution letterhead confirming liquid funds are available now.
• Used to prove you can cover the purchase price and closing costs (or cash gap).

 

When Is A Proof of Funds Letter Required In Real Estate?

A proof of funds letter is typically required any time a seller or platform needs to verify you have liquid cash available to close. You’ll most often be asked for it at (or before) the moment you make an offer, register to bid, or open escrow—especially on cash purchases.

Common situations where a POF is required:

• Cash offers on listed properties: Listing agents want a current POF submitted with the offer.
• Auctions (online or in-person): Needed to register/bid and again after you win to open escrow.
• REO/bank-owned & short sales: Asset managers typically require proof that you can fund quickly.
• Wholesaling/assignments or double closes: Sellers and closing agents may require POF to confirm you (or your end buyer/transactional lender) can perform.
• New construction or off-market deals: Builders and private sellers often request POF before accepting terms or holding a lot/property.
• Financed purchases (sometimes): You’ll show a preapproval for the loan and a POF for your down payment and closing costs.

High-volume investors/wholesalers: Keep a standing POF you can refresh quickly, then produce address-specific versions when a seller, MLS, or auction platform requires it.

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Is A Proof Of Funds Needed For A Cash Offer?

Yes. Always include a proof of funds letter (POF) with every cash offer. Listing agents and sellers use it to verify you can actually close—without it, strong offers are often ignored or rejected.

Fast POF checklist for cash offers:

• On bank/bridge-lender letterhead with contact info (PDF preferred)
• Dated within the last 30 days (some sellers/platforms require ≤14)
• Buyer/entity name exactly matches the offer and escrow
• Amount sufficient for purchase price, fees, and closing costs
• Address-specific version available on request (some MLS/auctions require it)

What Exactly Should A Proof Of Funds Letter Say?

A proof of funds letter should clearly confirm that you (or your buying entity) have liquid money available to close, using precise, verifiable details that sellers and agents can trust.

Must-have elements (include all):

• Issuing institution on letterhead: Bank, brokerage, or private/bridge lender name and address (e.g., “XYZ Lending Company”).
• Buyer/entity name: Your personal or LLC name exactly matching the offer/contract and escrow.
• Available amount: Either the total liquid balance (e.g., “$1,000,000 available”) or a property-specific amount at or above your offer (e.g., “$350,000 available for the purchase of 123 Main St.”).
• Liquidity statement: A line stating funds are liquid/available for closing (not restricted or pending).
• Date of issuance: Fresh—ideally within the last 30 days (some auctions require ≤14 days).
• Authorized signature & contact: Name, title, phone, and email of an authorized representative who can verify the letter.

Nice-to-have additions (improve acceptance):

• Property reference: Address or MLS ID if the agent/platform requests deal-specific POFs.
• Account type (optional): “Checking,” “savings,” or “brokerage” (no full account numbers; redact sensitive digits).
• Validity window: “Valid for 30 days from issuance” to reduce back-and-forth.
• Attachment: Redacted bank/brokerage statement that supports the stated balance.

Simple proof of funds letter template (copy/paste):

[Bank/Lender Letterhead]
Date: [MM/DD/YYYY]

To Whom It May Concern:

This letter confirms that [Buyer/Entity Name] maintains available liquid funds in the amount of
$[Amount] with [Institution Name]. These funds are current as of the date above and are
available for the purpose of purchasing real property [at: optional address, e.g., 123 Main St., City, ST].

Institution: [Institution Name], [Street Address, City, ST ZIP]
Contact: [Authorized Rep Name], [Title], Phone: [###-###-####], Email: [[email protected]]

Sincerely,
[Authorized Signature]
[Authorized Rep Name], [Title]
[Institution Name]

Pro tip: Export your POF as a PDF, keep it updated, and prepare address-specific versions on request—this helps your offer stand out and speeds up acceptance.

New To Real Estate Wholesaling? Start Here First

If you’ve been thinking, “I just need someone to show me the moves,” that’s us. We’re the mentor you’re looking for, and you don’t have to wait. Grab our free, step-by-step PDF that shows you how to wholesale in any state—from legal basics to buyer lists, offers, and closing. It’s concise, actionable, and designed for your first deal. Download the free guide now:

How To Get Proof of Funds From A Cash Buyer Investor

When proof of funds is required for wholesaling houses and for real estate investments, a Proof of Funds (POF) is needed with every offer. One way to get a Proof of Funds is from one of your Cash Buyers. A Cash Buyer is the real estate investor that is in the business of buying wholesale homes from you to renovate & sell at a profit.

You’re probably wondering, “How Do I Get Proof of Funds From A Cash Home Buyer Investor?” First, you need to find cash buyers & develop a relationship with them before asking to utilize their Proof of Funds for submitting offers. The Proof of Funds is a powerful financial document and will not be given to just anybody. However, if you have a great working relationship with your cash buyer, then you will have a higher likelihood of getting the Proof of Funds from them.

Let’s assume you’ve developed a strong, working relationship with your cash buyer because you’ve followed the steps in my previous article. Here’s an example of a cash buyer script when asking a cash buyer for Proof of Funds:

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"Hi, Todd. I want to send offers that I intend on wholesaling to you. I'd like to send the potential wholesale properties to you first so that we can continue building a great long-term relationship. Can I use your proof of funds so that I can send offers? And just for extreme clarity, if I can't get a yes or no from you in 24 hours, then I will send it to other buyers on my list. As I'm sure you understand, we have to act quickly on these deals."

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Let's go into the explanation of why we're saying this script. Remember that a Cash Buyer WANTS wholesale real estate deals. This is HOW a Cash Buyer makes their living by buying, fixing, & flipping the homes you wholesale to them.

Another way to increase the likelihood of getting a Proof of Funds from a Cash Buyer is to give them the first right of refusal on any wholesale deals you get under contract using their proof of funds. A “first right of refusal” essentially means the cash buyer gets first dibs at the property you’re wholesaling. They’re the first cash buyer you send the deal to, and if they want the property at the same price as the other investors, then the property will go to them since they are letting you utilize their proof of funds. Make sense?

I recommend offering this strategy to cash buyers who are serious investors and want to do many more deals. We’re not looking for tire kickers, solely professional cash buyers that want to do multiple real estate deals per month.

So, let me go ahead and show you a screenshot of a proof of funds example from a cash buyer below. As mentioned, proof of funds can be a screenshot, a bank statement from Wells Fargo, Chase, Bank of America, etc. So, this particular financing partner has sent me a screenshot of his bank account from Wells Fargo.

(I've blacked out certain items for privacy reasons). As you can see here, there's $1.2 million dollars in this account. To be exact, this proof of funds example allows me to submit offers for property at the price of $1,260,609.26 and below that number. Pretty cool, huh?

It was really a simple conversation for getting this POF because I utilized the cash buyer script I posted above.

Next is an image of the same proof of funds, but this time I pointed out a couple significant features I want you to be aware of. Take a look:

From the image, the ending collected balance is November 6, 2014. This means this proof of funds will be good for 30 days from that date, which means until December 6th. Remember, agents want to see proof of funds that are up-to-date and from within the last 30 days. So, at the end of the 30 days, on 12/6, December 6th, I would then need to ask for another proof of funds. A new Proof of Funds would just be a new, fresh screenshot of the same bank account with the new date listed of when the screenshot was taken.

So, that is how you get proof of funds from a cash buyer and exactly what it looks like! Many amateur wholesalers & real estate investors don't know what this is & don't know how to get one! Keep reading along so you don’t fall into the amateur bucket!

Now having an exclusive cash buyer with first right of refusal is not always ideal. However, this is a great way to obtain proof of funds if you're just starting out and need proof of funds quickly!

So, what’s another way to get a proof of funds letter?

Read Also:  10 Best Lead-Generation Strategies For Real Estate Investors 

How To Get A Proof Of Funds Letter From A Hard Money Lender

Hard Money Lenders are in the business of lending out capital on real estate investing deals, especially to investors who need capital for fixing & flipping homes. Because of this, hard money lenders are a great source for a proof of funds letter.

What Is A Hard Money Lender?

Hard money lenders are typically companies or individuals that lend money based on the investment potential of the property you are buying, and typically not your credit score. Hard money Loans usually cost more than an average mortgage from a bank because they’re quicker & more immediate than a bank loan.

How Do I Find Hard Money Lenders For Proof Of Funds?

So, how do you find hard money lenders for proof of funds? Well, first and foremost, attend your local REIA (Real Estate Investing Association) meetings, and meetup.com real estate events. You can also use my Google Ninja Trick by typing in "hard money lender" and your city name into Google.

Here’s an example of my Google Ninja Trick: I went ahead and searched "Hard money lender San Diego" and below is what you see from the results on Google:

As you can see here, there are four hard money lenders that you can then reach out to, call, and work with. So, it's not hard to find a hard money lender! So, if you thought that was tough to do, then let’s crush that limiting belief right now!

Once you’ve found the Hard Money Lenders, now you need to let them know you are a wholesaler & renovator, and that you’d like to use their company as a lending source for capital in the future.

Here’s a script example of what you can say to hard money lenders to get a proof of funds letter:

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"Is it all right if I use proof of funds from your company to submit offers on deals? I currently have another money source, but they delay in getting me an up-to-date proof of funds from time to time, and I'm looking for a more reliable money partner."

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What you want to do when asking a hard money lender for proof of funds is be authentic. If you plan on following the evolutionary stages of a real estate investor, from becoming a wholesaler, to a fix and flipper, to a buy and hold, then this is simple because the hard money lender knows you plan on fixing and flipping property eventually.

Let the hard money lender know you want them to be your reliable money partner when you wholesale & fix and flip houses. So, even though you're not fixing and flipping right now, we're leading them up to that. Plus, you're being authentic by letting them know that you wholesale and that you plan on being a fix-and-flipper. This is important because hard money lenders don't just want to give wholesalers proof of funds all the time, because then they wouldn't get any business from that.

Remember, a hard money lender is in the business of lending out capital for real estate investment deals. Give them a reason for doing business with you & for them to give you their proof of funds!

If you plan on progressing as a real estate investor, up the evolutionary stages, you will most likely use hard money to buy a fix-and-flip deal.

Let’s think about this for a second… who do you think you’ll go to if you need capital to fix & flip a house after you’ve gotten a few wholesales under your belt? You’ll probably go to this hard money lender because they helped you out when you needed a little help.

At this point, you would’ve developed a working relationship with them, and people work with those they trust & like! So, start building these hard money lender relationships now so you can get proof of funds & a reliable capital source in the future to buy real estate investment deals!

Read Also:  9 Best Hard Money Lenders For Beginners & First-Time Investors 

Hard Money Lender Proof Of Funds Letter Example:

Let's show you a real estate proof of funds letter example from a hard money lender, which looks like below. This is an account statement from a hard money lender (I just whited out some of the company names on here for privacy reasons):

Let's look at the most important things on this proof of fund letter (image below):

The ending date on this Proof of Funds is on September 31st. That means we have the ability to send offers from September 31st to October 31st because it's within the 30-day time period. Remember, you always need an up-to-date proof of funds from the last 30 days. Be aware of this because you will need to ask this hard money lender for fresh proof of funds every 30 days. Don’t be the amateur who gets one proof of funds and thinks it will work forever, because that’s not the case!

Now, the total funds available for this proof of funds is a little bit over one million dollars, $1,002,500 to be exact. This gives you the ability to send offers up to that price and any offers below that amount. This is solid proof of funds, given the amount of money we have to work with here.

So, I want you guys to see this hard money lender proof of funds letter examples & the example from the cash buyer so you understand what you're working with and what to look for! So, a proof of funds, a.k.a the golden ticket, is really just one phone conversation or one meeting away!

Seller Or Realtor Asking For Proof Of Funds?

Are you a real estate investor who has a seller or realtor asking for proof of funds? Don’t worry! This is completely normal, and you just need to follow the steps in this article to get a proof of funds letter from a cash buyer or hard money lender! Once you get legitimate proof of funds, then you can show it to the realtor or seller for each & every offer. Let's get into how to show the proof of funds correctly...

How To Show Proof Of Funds To A Real Estate Agent

The best & easiest way to show proof of funds to a real estate agent is to send it via email along with your offer terms for the deal, or along with the written contract for the deal. Save the Proof of Funds Letter as an image or PDF document and attach it to the email you’re sending. This will suffice for the realtor. Keep in mind that this is standard practice for the real estate agent, so they may (or may not) make you aware that they’ve received the Proof of Funds. It never hurts to follow up and ask if they have received the proof of funds via email.

Proof of Funds Letter FAQ

The FAQ section is designed to address common questions about flipping houses, providing helpful insights and solutions for both beginners and experienced real estate investors. Whether you're curious about financing, finding properties, or navigating legal requirements, these answers will guide you through the process with practical tips and expert advice.

Why Do Sellers Require a Proof of Funds Letter? 

Sellers require a proof of funds (POF) letter to verify that a buyer has the financial capability to complete the purchase. It reassures the seller that the buyer has enough liquid assets, whether through cash or financing, to cover the cost of the property. This document helps prevent deals from falling through due to a lack of funds and provides confidence in the buyer’s seriousness and ability to close the transaction promptly.

How Long is a Proof of Funds Letter Valid?

A proof of funds (POF) letter is typically valid for 30 to 90 days, depending on the institution issuing it. This timeframe reflects the fluid nature of financial accounts, as balances can change over time. If the property purchase process extends beyond this period, sellers may request an updated POF letter to ensure that the buyer’s financial situation remains stable. It’s essential to provide a current POF when making offers to avoid delays.

What Happens if I Don't Provide a Proof of Funds Letter? 

If you don't provide a proof of funds (POF) letter, the seller may reject your offer or refuse to negotiate further. Without proof of your financial ability to complete the purchase, the seller lacks assurance that you can afford the property, which can lead them to prioritize other buyers who provide this documentation. In competitive markets, failing to submit a POF can result in missed opportunities and delay your chances of securing a deal.

Final Thoughts On Proof Of Funds Letters In Real Estate

The intricacies of the real estate market can be daunting for many, especially when it comes to navigating the maze of necessary documentation. Understanding the fundamentals of a proof of funds letter in real estate is crucial for any prospective buyer. These instruments not only bolster your financial standing in the eyes of sellers but also help ensure a smoother transaction process. As you stride forward in your real estate journey, being well-armed with knowledge and the right documents will undeniably set you apart.

For those eager to delve deeper and harness even more expertise in the realm of real estate, we invite you to join our exclusive FREE training. Led by industry experts, this session promises a treasure trove of insights, strategies, and hands-on guidance. Equip yourself with the tools and knowledge needed to thrive in today's dynamic real estate landscape.

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*Disclosure: Real Estate Skills is not a law firm, and the information contained here does not constitute legal advice. You should consult with an attorney before making any legal conclusions. The information presented here is educational in nature. All investments involve risks, and the past performance of an investment, industry, sector, and/or market does not guarantee future returns or results. Investors are responsible for any investment decision they make. Such decisions should be based on an evaluation of their financial situation, investment objectives, risk tolerance, and liquidity needs.