Re: How Do I Write An - Posted by eric-fl
Posted by eric-fl on October 21, 2003 at 12:56:34:
Hard-money lenders typically lend on the basis of the property, rather than on the basis of you. There is a mixing of terms here - an “executive overview”, as the respondents posted below, would be part of an overall business plan. No one would ever put together a complete business plan for one single residential property, and no experienced HML would ask for that.
The way this usually breaks down is, 65% max LTV, with value being based on ARV (after-repaired value), usually around 15-18%, 5 or so points, 30 year amortization, interest only payments, short (1 year or less) balloon. Usually, you give them the address of the property, they have an appraiser they work with do an “as-is” and ARV appraisal, and a lot of them provide a laundry list of necessary repairs to get to ARV. If any of the money is to be used for repairs, it’s often escrowed for contractors to draw on at checkoff points.
If you’re dealing with someone who wants a full-up business plan, with executive summaries, competitive analysis, pro-forma financials, etc., you may be dealing with a commercial player who will have a hard time understanding what you are looking to do. Just make sure everyone is on the same page.