What is the best way to present to a private lender?

9 Replies

I have a friend that has a fair share of liquid assets and he continually makes comments that he would love to invest in my first house flip. I am now ready to move forward in this business, or close to it so how do I present it to him so that I can make him feel at ease with my professional analysis? I plan to present detailed math with AVR, pictures, timeframe and exit strategy. Do I make it flashy or simple. I would like to wow him with my knowledge so that when we complete our first deal he will be excited and wound up to do the next deal with me.

Honestly the Fix and Flip calculator in the Tools section would be perfect for what you need. It presents everything a lender wants to see, especially ROI. It provides a nice PDF output that looks better than any spreadsheet that you could put together in a timely manner.

It depends how much it would take to satisfy your lender.  As long as you can show there is enough profit for you to pay the loan back and/or provide them with a cut of the return you should be good to go.

The flip budget is the biggest thing to tackle because if you are off more than a little it can quickly take you from the black to the red. Also make sure your ARV estimate is accurate. Get a real estate agent to help you with that part.

Here is a list of items that a hard money lender would like to see:

  1. Project Financial Analysis - Breakdown of your financial analysis for the project showing your ARV, Repair Costs, Buying Costs, Holding Costs, Selling Costs, Financing Costs & Projected Profit
  2. Repair Estimate - Summary of Repairs broken down by Category
  3. Project Scope of Work - Detailed breakdown of all Estimated Repairs
  4. Comparable Sales Data - Comparable sales analysis of at least 3 similar, recently sold comps
  5. Property Photos - Photos of the existing property condition
  6. Your Resume - Your resume of past experiences, & action plan for the project

I have uploaded a sample Investment Presentation in my fileplace as an example:


Make a use of funds, proforma, exit strategy, have your personal and business taxes and bank reports available, your credit score proof.  All that flash doesn't impress me much i need the facts.

@Donny Hogan Include details in your presentation on how you'll secure your friends investment so they feel at ease. Let him know he will have a Note and Mortgage secured on the property. Possibly go into how you'll structure the partnership.

Just my opinion but, if I see a 100 page document come in with a loan for a place and its all words. I know that it is over done. Your original ask from a lender needs to be shorter.  More times than not I have to go in and pull the valuable information out of those long packs because the lenders do not want all the fluff.  State the things they need to know.....

1. Use of Funds- a one page explanation 

2. Business Plan- no longer than a page or two should say who is in this project

3. Exit Strategy- one paragraph

4. Tax documentation for 2-3 years

5. Business and Personal bank accounts for 6 months

6. A 1003 if needed

7. A Proforma - one page stating the next 5 years

8. A copy of your three credit reports

I am a consultant and if I send these 8 things I can usually get funding.  Will I need to send more paperwork for my client?  Yes eventually if the lender asks for it.   Can I wrap it in a bow with pictures of what it is. Yes, but banks don't say hey that is a great picture I will loan them money. 

Just think of it like this if you go to a restaurant, you get a menu.  On this menu it tells you where each and every ingredient is from what it tastes like what it smelled like in great detail.  Would you enjoy going there to eat? Make you application for a loan streamlined. Get them to be interested in the project and then they will ask for the ingredients. 

Good Luck!

Just wanted to throw in there that we have used the BP Calculator Reports for both our Portfolio Lender and Private Lenders, and they all LOVE it. They see it as a great 'summary' of things all in one place without all the un-needed fluf and words. 

Ours is for rentals, not flips, but the same concept. 

Dan Dietz

Agreed on several comments above - scope of work (with or without pictures) is very helpful ESPECIALLY to those who aren't in the flipping business. You have to somewhat sell yourself but the project is more important to those that fund here and there....what is the funders profit out of the deal, can be a deciding factor, again, for those who don't know the business.  If you don't have project history, you can offer collateral. And reassure them by doing things like adding them on the insurance policy (and you send them proof before funds are sent over). 

Everyone is different and you have to cater to your audience. There's no correct answer. If it's a private individual that you're pitching to, I'm certain they will want to see more and something different than a hard money lender or private lending company. 

If you would like to wow him with your knowledge, it's your first deal and his fist deal with you, then I think putting more time into this would be preferred. I would focus more on the analysis/numbers than the aesthetic. Something simple and easy to read should be fine. 

When you're dealing with actual hard money lenders, private lenders, non-bank lenders, and you're submitting them a deal, usually all they want to know is the basics: purchase price, rehab cost, the ARV/exit strategy, etc.