PT1/5: Capital Acquisition

[Sam Valme]

Hey BP Family, 

I have a couple of questions I could use everyones help with. I am building what will end up as the basis of my companies new business plan. In an effort to keep the responses specific I'm going to break up my forum posts. The first one has to do with Capital Acquisition. 

We're looking to Implement the BRRRR & Flip strategy depending on how the property meets my criteria. Below my current strategy to acquire capital from private investors along with some questions I have. Please provide any feedback that may help me build out our thought process a bit more. Thanks in advance!

Private Money for Initial Purchase

• Terms of Private Money
• 1 Year Loan - Interest Only Payment at 5-9% (The goal is to pay the lender back ASAP)
• Contingencies for Extensions and Loan Conversions After 1 Year loan.
• Step 1 - 1st Extension (3 Months)- 1% Rate Increase Interest Only
• Step 2 - 2nd Extension (3 Months) - Rate increased to 15% APR
• Step 3 - Loan Conversion (5,10,15 Yr)- Convert to a Note at 5, 10, or 15 Yr. Loan payment at 15% APR (Depending on property performance to minimize loses)

Bank Refinancing for Long Term Holds

• Refinance Network
• Primary Lender - Presented Deal prior to closing on property, understands ARV, has agreed that if #s are correct Refi is possible.
• Back up lenders 1,2,3 - Attained through referrals and past work. Can be contacted quickly and understand business plan and methodologies if Primary lender falls through.

Questions:

1. How would I handle deals that require more than one lender?
2. What do I need to present to a bank to get help refinancing
3. What legal documents need to be generated before money can be transferred from investor?
4. How is the money transferred? e.g Any issue moving $50,000 from one bank account to another? $100,000?
5. What legal documents need to be created to detail interest rates, extensions and loan conversions?