Getting your private capital loan request approved is about more than just filling out an application and handing over financial documents. Private capital lenders care about more than just the numbers; they want to know the borrower’s character and vision for the project. Thus, it’s important to prepare a presentation to go along with your application to let your lender get to know you and why they should fund your project. There are some key things to include in your initial presentation to a private capital lender.

1. Loan application and a copy of your credit report. This allows your lender to quickly assess the financial status of the borrower and the prospective property.
2. Certificate of formation and taxpayer identification number. This information is mostly necessary if you’re purchasing properties as a company or LLC rather than as an individual investor.
3. Executive summary. This should be a brief summary of what you plan to do with the property, including proposed renovations or rehabilitations and at least one exit strategy.
4. Scope of work and estimated costs for any improvements. This allows the lender to evaluate the cost of any proposed rehabilitations or renovations and to determine how much added value to expect.
5. Comparable sales for the target property. This shows your lender that you’ve conducted your due diligence and allows them to quickly gauge how good the purchase price is.
6. Expected profit statement. This should include purchase price, estimated closing costs and interest expenses, rehabilitation costs, rent rolls (if there are any current tenants), and anticipated selling price or after-repairs value (depending on your exit strategy). It’s also a good idea to include your proposed downpayment to show your lender that you will have skin in the game.

Providing all of this information upfront will enable your prospective lender to move faster than a conventional lender. Because private capital lenders don’t have the same regulations and restrictions hemming them in, they can often underwrite and close loans within weeks, instead of the months needed to secure conventional financing. The more complete your initial presentation is, the more quickly your lender should be able to fund your loan.

If you have more questions about hard money or private capital loans or have a loan presentation that you’d like to share with us, contact Montegra at 303-377-4181.