01/03 2016

Loans for Real Estate Investors

I always ask: “Do you have a one page deal sheet put together?”   because many lenders decide to lend based upon whether or not your real estate transaction makes sense.   Credit Scores MAY improve your rate, but private investors are more interested in deal structure, potential profit, and common sense approach to investing.  So having a “deal sheet”  is the first document you should produce after finding that great real estate investment.

Don’t waste your time or the Lenders time:  Create a One Page Deal Sheet, and I will start with some of the basics today, and elaborate on this in the next segment.

Hard Money Loans

Before beginning, you will want to think about your objectives, and goals, and what you are trying to do.  Take notes.  Write down your thoughts so that you are crystallizing your thinking on what you want to gain from this project, what you are trying to do, and what is your exit strategy.

Then, after you have written down notes (often over a period of a day or so, or overnight) you will want to put pen to paper again, to craft your deal sheet.

Here are some tips that I find helpful when advising clients about creating a one pager:

~  Keep it simple, the shorter the better.  As the famous copywriter Dan Kennedy famously said: “Brevity. Brevity. Brevity! Always be shortening”   When you think you have your deal sheet as concise as possible? Shorten it some more.

~  Keep working your opening paragraph as both a story telling mechanism, AND  what you are attempting to do.  For instance:

“House purchase in Miami with $60,000 of profit after taking out a 70% LTV hard money loan; and two months of remodeling.  I plan on selling the house on Craigslist and some paid house flipping sites”

~  Add spreadsheets and pictures to tell your story.  Do you have an artists rendering of what the property will look like after improvements?  Do you have some pro forma projections you can add to this deal sheet? Include them!

~  Make it easy for the possible Lender/Investor/Joint Venture Partner to read your document.  I like to create a “Google Doc” and just send them the URL so they can open the Deal Sheet in their browser with no download.  This is instant, effortless, and takes up no space in their browser.

~  Use your Deal Sheet as a starting point to craft an entire business plan.  Business Plans show that you are oganized and that you are fully prepared to do this deal.  Investors don’t  want to waste time with people who are not serious.

~  Wait for an Investor to ask for your deal sheet, or more information.  If you are automatically sending it to everybody, you won’t get feedback or interest from everyone.  So you will never be able to weed out the serious investors from those who are not interested, so wait for them to ask for more information.

 

I am surprised at the number of real estate investors who are not organized, and have not even taken the time to put together an outline of their projects.   Brokers and Lenders find it  VERY difficult to “sell” your project to their Investors without a deal sheet which outlines the project.   Don’t write a book.  You are trying to be concise and get information to and from the Lender, and this will put you ahead of those real estate investors who are dreamers and non players.

 

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Tom has over 30 years experience in lending.  He specializes in Business Loans, and Real Estate Transactions.  Feel free to call him at 703-801-0377.

We have been in the hard money lending business since the 1980s.  If you are new to hard money loans, keep in mind these loans are very similar to bridge loans, but backed by a private lender.  AmeriFunding ensures…

  • Loans are processed very fast!

  • There are no Up Front Fees or Hidden Costs.

  • Hard Money Company is a Member of the AAPL.

  • Our terms are the best in the industry!

  • Our Only Criteria? Your Deal has to make money!  If it makes sense, then we can finance it.

 

YES! I want AmeriFunding’s Help with a Real Estate Deal!

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