What Makes a Deal “Finance-Ready”?

Question

When reviewing a potential deal, what information do you make sure is organized before talking to lenders or partners?

I’m interested in what others consider essential when preparing a deal to move quickly.

Mohammed Rahman · Answer

That should depend on your financing strategy. What's "financial-ready" for a conventional lender may be very different from what’s needed for a private or hard money lender.

But I would think that keeping the following critical information organized should be enough: property details (address, square footage, number of units, lot size, age & condition of major systems), financials (purchase price, estimated rehab costs, projected rents, current expenses, and cash flow analysis), comps, exit strategies, and timeline and contingencies (how soon can you close, rehab schedule, and potential obstacles).

Jaron Walling · Answer

@Brandon Lee

Location, property condition, value-add (renovation budget), future CF, or flip profit. I'd break that down into an APOD spreadsheet so the numbers are clear. A business makes money. Show it making money and don't fudge the numbers.

Define the exit strategy. Does the deal work as a LTR, MTR, STR, or a profitable flip? Ideally you can pivot to limit risk. How much $$$ are you putting into the deal?

Business operations. Do you have a good lease? Have worked with contractors? How much experience do you have with this type of real estate? A partner or private money lender will ask these questions if they're serious.