Proof of Funds for an Apartment Offer When You Plan to Syndicate: What to Send the Broker
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A proof of funds (POF) letter shows a seller that a buyer has the money to close. When you plan to syndicate, you do not have the full equity yet, because investors fund after you are under contract. That is normal, and brokers who sell apartment buildings see it all the time. What they really want to know is whether you can post the earnest money, get the loan, and raise the rest of the equity before the closing date. Answer those three questions with real documents: bank statements for the deposit money you actually have, a lender letter of interest or term sheet, a short equity plan, and, if your own liquidity is thin, a co-sponsor or key principal whose statements cover what the lender requires. Never send a fake, altered or inflated POF letter, and never present investors' soft commitments as committed money.
This post is part of our guide to real estate syndication. It covers what sellers check, the honest options for a sponsor who raises after signing, what not to do, and how POF fits the LOI and purchase agreement timeline. Information is as of November 2026.
What is a proof of funds letter?
A POF is a document that shows a buyer has access to a stated amount of money. For a house bought with cash, it is often a bank or brokerage statement, or a short letter from the bank confirming a balance. For an apartment building bought with a loan and outside equity, a POF is less about the full price and more about whether the buyer can fund the cash it needs: the earnest money now, and the down payment, closing costs and reserves at closing.
A bank letter, when a bank agrees to write one, usually says something short and factual: the account holder's name, that the account is open and in good standing, and the balance or available funds as of a date, sometimes as a range. Banks often decline to write letters that predict future balances or promise money. The letter does not commit the bank to lend, and it does not cover money that belongs to anyone else.
What do sellers and brokers really want to see?
A listing broker is protecting the seller from a buyer who ties up the property and then fails to close. They look at four things:
| Question | What answers it honestly |
|---|---|
| Can you post the earnest money? | Your own bank or brokerage statement covering the deposit amount |
| Can you get the loan? | A lender letter of interest, term sheet or quote for this property |
| Can you raise the equity? | An equity plan: amount needed, structure, timing and your investor relationships, described truthfully |
| Have you or your team closed before? | Your track record, or a co-sponsor's, broker references, and the property manager you plan to use |
Brokers weigh these together. A buyer with a strong lender, a real key principal and a team that has closed similar buildings often wins over a buyer who only waves a large balance. If you are new, see working with apartment brokers when you have no track record.
What are the honest options for a sponsor raising from investors?
1. Your own funds for the earnest money. The deposit is usually the first money at risk, and it is usually the sponsor's. Show a statement for the amount you will deposit. It is reasonable to redact account numbers. See earnest money and the letter of intent in a syndication for how deposits go hard and when they are at risk.
2. A lender letter of interest or term sheet. A letter of interest from a lender or mortgage broker who has looked at the property's numbers tells the seller the debt side is real. It is not a commitment, and it should not be described as one. It does show you have started the loan process and that the building appears to support a loan of a certain size. See what lenders want from a borrower who is raising equity.
3. A short equity plan. One page with the equity needed, the offering type, your planned raise timeline against the contract dates, and your relationships with investors. It describes facts, not promises.
4. Soft commitments, described truthfully. If people have told you they are interested in investing, you can say so in general terms: for example, "We have received non-binding indications of interest from prospective investors. These are not commitments and may change." Do not total them up as if they were money in the bank. See soft commitments vs signed subscriptions.
5. A co-sponsor or key principal with liquidity. Agency and bank lenders usually require a key principal or guarantor who meets net worth and liquidity tests. If that person signs on as part of your sponsor team, their statements can support your offer. They must actually be part of the deal, with a defined role and compensation. See bringing on a co-sponsor or key principal for your first deal.
6. Reservations, where your offering structure allows them. Some sponsors collect reservation indications before the offering opens. These are not funds either, and they need the same careful description. See reservation deposits before the offering opens.
What should you never do?
- Never send a fake, altered or "borrowed" POF letter. Editing a statement, using a template letter with invented balances, or buying a "POF letter" service that puts money in your name for a day is fraud. Using false financial statements to influence a lender can be a federal crime, and a seller who relies on one can sue.
- Never inflate. Do not round up a balance, combine accounts you do not control, or show money that is already committed elsewhere.
- Never present soft commitments as committed money. Telling a seller "we have $3 million committed" when you have verbal interest misleads the seller, and if the same claim reaches investors it can become a securities problem.
- Never name investors or share their finances. Do not forward an investor's statements, list their names, or describe their net worth to a broker. That information was given to you in confidence, and a seller does not need it.
- Do not let a seller think the loan is approved when you have a letter of interest. Say what stage it is in.
When do you send it: LOI or purchase agreement?
Timing varies by market and broker, but a common pattern:
- Before or with the LOI. A broker may ask for a sponsor bio, a track record summary and evidence that you can post the deposit. Some ask for a lender letter of interest at this stage, especially for a competitive listing.
- After the LOI is accepted, before the purchase agreement. The seller may ask for more: the lender letter if you have not sent it, a key principal's financial summary, and the earnest money amount and schedule.
- In the purchase agreement. The contract sets the deposit, the dates it becomes non-refundable, and the financing contingency, if any. See apartment purchase contract contingencies and deadlines.
- During the raise. Some sellers ask for updates. Give accurate ones: subscriptions signed, money in escrow, loan status.
If the raise falls behind the contract dates, talk to the seller early about an extension rather than overstating your progress. See if you fall short of your equity raise before closing.
A simple package you can send
An honest response to "send proof of funds" often looks like this:
- A cover note: who the buying entity will be, the sponsor team, and that equity will come from a private offering to investors.
- A redacted statement showing the earnest money amount.
- A lender letter of interest or term sheet for this property.
- A one page equity plan with the raise timeline.
- If you have one, a key principal's liquidity summary or a letter from their bank, with their consent.
- A short track record, yours or the team's, with only true facts.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5 or more units from their friends and followers, in 506(b) and 506(c) deals. DoorRaise forms the deal's LLC, prepares the offering documents, files Form D and verifies every investor's accreditation. Investors fund by wire into escrow at Enterprise Bank & Trust, so once subscriptions are signed and funded you can tell a seller accurately how much money is in escrow. DoorRaise does not write proof of funds letters, arrange loans or act as a broker. After closing, DoorRaise runs quarterly distributions, investor updates and K-1 delivery (the deal's accountant prepares the K-1s). DoorRaise charges two flat fees: $1,500 to set up (non-refundable) and $5,000 a year for administration, the first year paid at closing from the money raised and only if the deal closes.
FAQ
Can I make an offer on an apartment building before I raise the money?
Yes. Most syndicated purchases work this way: the sponsor signs the contract, posts the deposit and then raises equity during due diligence. The seller needs confidence that you can close on time.
What should a proof of funds letter from a bank say?
Usually the account holder, that the account is open and in good standing, and the balance or available funds as of a date. Banks write only what their records show, and many will not write a letter at all, in which case a statement works.
Can I use soft commitments as proof of funds?
No, not as funds. You can mention that you have non-binding indications of interest, described as exactly that, but they are not money you can close with.
Is it illegal to use a fake proof of funds letter?
A fake or altered financial document used to win a contract or a loan can be fraud under state and federal law. Never do it, and never use a service that offers one.
Can a co-sponsor's money count?
A co-sponsor or key principal's liquidity can support the offer and the loan if they are genuinely part of the sponsor team and agree to share their information.
Should I share my investor list with the broker?
No. Describe your equity plan in general terms. Investors' names and finances stay private.
Sources
- 18 U.S.C. 1014, Loan and credit applications generally (Cornell LII)
- 17 CFR 240.10b-5: Employment of manipulative and deceptive devices (Cornell LII)
- SEC, Private placements under Rule 506(b)
- SEC, General solicitation under Rule 506(c)
This article is general information, not legal, tax or investment advice. DoorRaise is not a real estate broker, lender, law firm, broker-dealer, investment adviser or funding portal.