RealEstateInvestment.net
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Preparing The Proper Documentation For Initial Review of Your Loan Request Want your loan package to catch the eye of your Mortgage Broker/Banker? The following guidelines will tell you how to do just exactly that! More often than not, Mortgage Brokers/Bankers all across the country receive poorly prepared loan packages from potential Borrowers. A poorly prepared loan package will ultimately find its way to the bottom of the pile, if not in the trash. Your Mortgage Broker/Banker must be able to develop a clear understanding of your property's characteristics, operation, performance, management, location, etc. In order to do so, it is imperative that you prepare the appropriate documents and assemble them in a format that provides your Mortgage Broker/Banker with the salient facts and in an easily accessible format. To obtain a preliminary loan quote for an acquisition or refinance, here's a guideline of what you need to submit to your Mortgage Broker/Banker: 1. Description of Property and Neighborhood (including color photographs). Include gross & net square footage, layout, number of stories, condition, needed repairs, area data, age, and estimated value. 2. Three Years of Operating Statements (detail of income & expenses). For hotels, need 12 month trailing average with historic ADR & ADO. 3. Current Years Budget with year-to-date Actual. Proforma should show income at 100% occupancy with deduction for vacancy, replacement reserves, tenant improvement costs per square foot and percentage paid for leasing commissions where applicable. 4. Current Rent Roll [if hotel: ADO [occupancy] and ADR [average daily rate]. Include dates leases commenced and expire, any increases within existing contracts and market rent for existing and new tenants. If hotel, include fees payable under Franchise Agreement and remaining term of contract. 5. Profile and Experience of Owner and Management Company. Resume, background, years in the business, other properties owned and other properties managed. 6. Balance on Existing Debt (with use of funds statement). Current balance on all liens and status of loans (use of new loan proceeds). If the loan is for an acquisition, please provide purchase price and breakdown of renovations planned. 7. Executive Summary from recent MAI or other Technical Reports. (if available) Market rent and market occupancy data. Include any excerpts from recent appraisals, Market Studies or Feasibility Reports, if available. Submitting a package to your Mortgage Broker/Banker that is formulated around this checklist is sure to get your deal noticed and a quick response. Always remember, irregardless whether your package is in print format or in electronic format to be e-mailed, be sure to provide the necessary information in a complete and user-friendly format. Apply for a commercial loan online. Get a 24 hour response. Click Here Now |
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