If you approach them correctly, with the proper information in the right format, they will give your deal an honest look and, if ones deal meets their variables, they will fund people quickly and efficiently.
I recommend that you summarize your loan scenario one 8. 5 X 11 inch sheet of paper. You will be tempted to write up a multi-page description filled with details, projections and analysis. Don't. The goal of the main approach is to get a loan officer interested, practically nothing more. A borrower with a lender requesting information is a much stronger position compared to a borrower who is delivering information unsolicited.
Within my firm, we call these kind of summaries "Deal Point Memos" and every deal, whether half-a-million and half-a-billion, is reduced to 1 page that contains the different truly relevant information within simple and concise terminology. (This 1 page summary was designed to be used concurrently with your first contact with a lender and really confused with a full "Executive Summary" that also includes many details and may be as-many-as 15 pages longer.)
Listed here are the essential elements of an effective deal summary. These are the key elements a lender will consider as soon as deciding whether-or-not to pursue credit.
Account of Collateral Property
State the positioning of the property along with the property type (stretch of land, office, multi-family etc.).
Include 1 sentence on why the location is favorable. Briefly illustrate the property's age, situation, and size in rectangle feet. Mention the zoning and note whether the property is vacant, under-performing or producing sufficient earnings. Definitely state the value in the property and how that will value was derived.
Specific Loan Request & General Use of Capital
The majority lenders have minimums and maximums so be sure to let them know exactly how much financing you are trying to get. Is this to be a short term "bridge" type loan or trying to find permanent financing? Tell them the loan term you would like in months. They ought to know what their funds is going to be used for, and it can help if mention that the cash will be going back up in the property, so include a general use of monies statement. But remember, this isn't the place for a detailed budget or pro-forma. If you are acquiring an asset you will need to state the exact final cost.
Hard & Soft Equity
Challenging equity is cash that the borrower has already place in the property or has on the market to make the deal job. A down-payment is challenging equity, site improvements and engineering and other costs as well be credited to a customer as cash-in-the-deal. Lenders shun sponsors who don't have a substantial cash commitment to your project, so if you have skin-in-the-game, highlight it. Soft equity is, of course, the value of the property over and above the debt against the idea, the more the far better.
Debt Service and Exit Strategy
It is paramount that a customer demonstrates that they have the ability to make mortgage payments on-time and also to pay the loan back at maturity. Illustrate your ability to produce payments and clearly state how you intend to meet any pay-off and balloon payment. Money Lender