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3 Documents That Every Real Estate Investor Needs On-Demand

“You only have one chance to make a first impression…” You’ve heard it a hundred times, yet how many times have you spent time perfecting your first impression? As a direct lender, I interact with hundreds of new real estate investors looking to make the jump from residential multifamily properties to commercial multifamily properties. I can tell you that in many cases, the Personal Financial Statements, (PFS) lack quality and appearance, both of which can be easily improved in a matter of minutes. How can you market yourself in a clearer, better light?

We all do it. It’s usually unconsciously but we judge each new person we meet in multiple ways. How they are dressed and groomed, their facial expressions and attitude, their speech and mannerisms, their stature or shape, how genuine they are, etc. The same thing happens when a lender or broker is speaking with you about your project. Both you and your lender are forming opinions on the others ability to perform.

At the end of the introductory call or meeting, a request is usually made to start the initial review of the project and its sponsor/sponsors. The lender or broker needs to evaluate the performance of the property to see if it’s worth spending more time on before it is ever sent to the underwriters. They also need to make sure the sponsor team has the ability, experience, and credit to get approved. Questions of sponsor’s net worth, liquidity and credit worthiness are always first on the list when evaluating sponsors.

Therefore, the most important document a real estate investor must have is the Personal Financial Statement (PFS). Of course, if one isn’t available, a 1003 application will work, but a hastily filled in document isn’t the ideal. Think of a glossy marketing piece from a business that is seeking buyers of a product with a price tag of two million-dollars. How much time and money would be spent creating photographs and crafting every word of every sentence about the ways the product will change your life? The PFS is your marketing piece or brochure representing you as an investor. You need to convince the lender to loan you millions of dollars.

Your PFS should be converted into a pdf to protect the information. What must be in it? As a starting point, pull up a 1003 application and take down all the categories. First, put your identifying info. Follow up with a clear executive summary of the most important facts of your financial status and background. Include necessary graphs, tables, and schedules to help organize and clearly display your data. For a step in the right direction, download our fillable form below and type in the information.

The next document is your “SREO”, the schedule of real estate owned. It is ideally a spreadsheet showing all the properties that you own. Each property ideally includes these details;

    • property name

    • property address

    • property city, state and zip code

    • type of property

    • number of units

    • acquisition date

    • ownership role

    • percentage of ownership

    • current percentage of occupancy

    • annual NOI

    • current market value

    • original loan amount

    • original loan date

    • current loan balance

    • loan interest rate

    • monthly payment (P&I)

    • loan maturity date

    • property disposition date

    • loan status (current/delinquent)

    • lender name

    • additional notes

This list is exhaustive, sure, but if you have them all, you have given the lender everything they will need for the full underwriting process. It shows them you run your business like a serious investor.

The third document is the Real Estate Resume. It’s not a mandatory document, but it’s a great way to have your deal taken more seriously. To clarify, this is not your educational or career based resume; this is everything that you’ve done and learned as an investor in real estate. Start with your personal information, followed by an executive summary and then bullet points of your accomplishments.

This is another opportunity to sell “you” as a good risk. If you’ve done 4 or 5 fix-n-flips, list them out with numbers, results, and conclusions. If you’ve done 10 or more, you need to summarize them. Unlike the REO, this is “why” you decided to acquire that specific property and what you did to realize your goal. Tell the story behind the properties you’ve bought, how you analyzed them, your strategy to increase values, raise rents etc. If you’ve sold off some properties, explain why you did and what the outcome was.

In closing, the very best way to impress your lender is to have these documents readily on-demand. When the call is over, you will be able to attach them and send them over immediately. If I were going to a meeting with a lender for the first time, I’d have these documents copied on a jump drive to hand them, assuming they had earned my trust. Like any professional writing you’ve done, these documents need several revisions to become well-constructed, final versions. Follow the links below for examples and downloadable, fillable docs that you can start using today. Good luck and we’ll see you out there!


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