10 Essentials

  1. Tell a good STORY of the situation and reason for the funding request, the history & what these funds will accomplish
  2. Ask for what you WANT: amount and terms (debt or equity, LTV, LTC, rate, months, recourse or non-recourse, etc) along with use of funds to include interest reserve and loan costs and points plus Total Project Costs (past and future).
  3. List how it STACKS UP: provide the proposed capital stack (Loan, Equity, etc) to cover the Total Project Costs.
  4. Justify with VALUE: Provide “As is” value and completed or after repair value. Send existing BOV, BPO or Appraisal.
  5. Don’t skip the DETAILS such property address, description, year built, original purchase price or cost and date, existing liens including lender name, balance, payment, terms and status (current or in default), etc.
  6. Give the SKIN in the game: breakdown of cash invested to date & fresh borrower cash at closing
  7. Tell WHO you are: Experience of the borrowers/principals should be briefly summarized along with each of their personal liquidity, gross assets, net worth and credit scores. The borrowing entity name, address, experience/other projects, contact person, and a summary of its financials (liquidity, gross assets, and net worth)
  8. Give a PICTURE: Property pictures, aerials, and/or drawings. If construction, include a description, sq ft to be built, time to complete.
  9. Show ’em the MONEY: Summary of historical EBITDA or NOI if any. P&L projections for 3 to 5 years again to show EBITDA or NOI (show Gross Revenue, Expenses, and EBITDA or NOI totals only, detail in those categories should be in separate financial projection statements) If the property is leased or to be leased, summarize the leases and provide a rent roll.
  10. Describe the EXIT to pay back the funding. This could be from income, sale or refinance. You could also have multiple strategies.