All, I am getting ready to do my first commercial loan. I am debating what to put into the lender packet to make sure I don't have issues when soliciting the debt. I was thinking about putting in the following:
- Personal financial statement
- Prior rent rolls on the property for 3 years
- Some type of public report on the value of the complex (zillow or other) ... not sure on this one
- A profitability statement ... thinking about using the one on this site from https://www.biggerpockets.com/real-estate-investme... (rental property calculator)
- Some kind of summary letter with my intent, actions and management overview
Too much? Too little?
Thanks in advance,
@Michael Hutchinson I have been thinking about this too, but we are already many properties into it, and looking for both more properties and investors to partner with too.
I think it sounds like a good start you have. Do you have any experience as far as construction goes also if you are buying places that need any fixing?
What I did for our last two purchases that consisted of 4 duplexs and 1 fourplex in two different deals was send a copy from the BP Rental Calculator (Lender said he was VERY impressed) along with a personal 'bio' on both myself and two partners. This was somewhat in 'story format' going all the way back to my grandfather investing in the 70s in the silicon valley up to the fact we have managed our own businesses for 2 decades, and our past experience with rentals, pictures of our current places (we take very good care of them) including things like the fact that our vacancy runs less than 2% but we still figure 5% into our projections to be conservative.
One of the recent 'touches' we are going to add since we have the equipment at our 'day job' is to laminate the front and back covers and use a binding machine (total cost about $150 for them) instead of just stapling things.
I think the more professional the better.
@Michael Hutchinson In general, the lender will tell you what they need. I have seen 2 years of rent rolls and I have seen 3. I have also seen LOTS of other items needed, and just a few other items needed. I would recommend to give the lender ONLY what they ask for. As giving them too many thing might create more work and more conditions to clear. It's ok to put this stuff together first but I would not give them anything unless they ask for it.
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