This post will explore the sponsor underwriting process, utilizing a structured and practical approach for assessing potential sponsors.Sponsor Screening ProcessThe sponsor screening process can be divided into several key steps, each crucial for a thorough evaluation.

Items you will be asked for will be:Address:Purchase Price:Rehab budget:Estimated Term needed:Estimated ARV:Square Feet:Configuration (Bedrooms, Bathrooms):Rehab short description:Explain why this is a good deal:Your history in real estate (including number of flips):Any other comments about the project:Include a Property Data Sheet (MLS Listing, FSBO Ad, Auction Listing, etc)Also include a minimum of 3 Solid Sales Comparables – preferable realtor generated*Once all of stage one above is sent in it can take up to 24 hours for approval to move on to stage 2.Stage 2 on the following page.1Page 2 of 2-Stage 2-After initial review we’ll need the following items sent to processing (Note: all costsat this point are your responsibility & don’t guarantee funding):Inspection from a professional inspectorBPO or Appraisal (Please see guidelines below for a BPO)REPCDates: Inspection Period, Settlement DateDetailed Renovation Budget from 3 contractors (please tell is which contractor you feel best about using)More info may be needed as we move forward, it depends on the best structure for the deal*Once all of stage 2 is submitted in will take a few hours to review and if everything is approved it can take upto 10 business days to close.BPO Guidelines:Please do not use your buyer’s agent to do the BPO.

Here’s a great article that walks you through how to qualify for REPS status.https://www.aicpa.org/resources/article/tax-rules-for-real-estate-professionalsEntity Structure ComparisonBe sure to consult with a CPA or tax attorney as the entity structure you select can have a significant tax impact.

Velocity of money, or speed in which you can complete a BRRRR investment and repeat, is key to success, and refinancing with the shortest seasoning requirements is highly important.Loan terms and interest: Cash flow is also an important consideration for a refinanced rental property, so attaining a low interest rate, as well as other aspects of loan structure (term, amortization, or interest only, etc.), plays a big role.Generally, there are three main refinance options for BRRRR method investors: Conventional loansBank/credit union loansDSCR loansConventional loans are generally defined as loans originated under GSE (Fannie Mae/Freddie Mac) rules and guidelines and securitized.

Structural repairs are not allowed, such as room additions, foundation repairs, etc.

This is easier for someone who earns a fixed salary, no overtime, no complicated pay structures, not a business owner, etc.   

Do your research to find places where you can get a good return on your investment.Legacy Planning: If passing on your investment to your kids is important, consider how you can structure your investments to make that process easier, whether through trusts, wills, or other estate planning tools.With the right strategy, you can absolutely build a successful real estate portfolio at this stage of your life.

DSCR loans will be structured off the rent versus expenses on the property and don't consider your personal income or DTI.

@Chris Seveney We havent asked this question yet, How would we structure this?

The property was finally sold to a developer who built a 3-story structure housing 6 condos that sold for half a million each.Getting variances is quite time consuming in our area and I attended quite a few community board meetings which one has to attend before going to a zoning board meeting.