Documents for funding.

[Diana Cruz]

I have a question? Do I have to have a business executive summary for the lender if it is part of the list of documents to submit? And does that mean I have to have a business plan and be a legal entity to submit for funding to purchase property?

And if I do have to have a business plan writen would it be like a retail business plan were you have to have industry stats and market nich as well as targeted market?

Or can I just write a summary of my investment goals, my purchasing nich and future plans for my investment properties.

[Giovanni Isaksen]

On all the apartment loans we've done lately the lender required us to set up a separate entity to hold the property in. This wasn't a problem as that's our standard operating plan but something to keep in mind.

As Bill said the business plan for a real estate investment is a simple document. We supply a narrative detailing what the property is, the condition of the property, why we're buying it and what we plan to do with it, both initially and what our long term investment objective for the property is. If we are going to reposition the property or it requires significant repairs we supply a capex budget broken out into line items. We also supply a 24 month operating budget and a five year proforma.

I would include in the narrative any relevant experience you or your partners have and if you have one, a track record of previous investments that you operate currently or that have gone full cycle. After that the lender will have a long list of requests, many of which will involve restating information you've already given them. Respond to all their requests as quickly and completely as possible, this is key to having the best chance at getting the loan approved. Save your negotiating skills for the terms of the loan, not for the information they request.

Good hunting!