24-Hour Approval Checklist

In addition to these static documents, your private lender may ask you for a few additional documents to see check your financial capacity and credit. These documents are more time sensitive as they are likely subject to change over the short term.

These documents are (1) a credit report and (2) bank statement(s) or asset statement(s). 

A smaller private lender will likely ask for these documents one to two times per year while national lenders may ask for this information on a deal-by-deal basis.

Credit Reports: Your lender will likely ask you to use their preferred credit report provider. At Sharper Capital Partners, this currently costs $12.99 and it is paid directly to the credit report provider. If they don’t have a credit report agency they prefer, you can easily apply for one and send it to your lender through TransUnion, Equifax, or Experian.

Recap: In short, here is a quick list of everything you should have in a shared folder and ready to send to your lender come time to apply for funding.

Personal Legal Docs and Information:

1. Operating Agreement with Membership Interest
2. Copy of Drivers License or Federal ID (for all members/shareholders of the company)
3. Excel Spreadsheet or Word Doc Containing:
   
   1. Employer Identification Number (EIN)
   2. This can be found on your SS-4
   3. For Each Members of the Company:
      
      1. First Name
      2. Last Name
      3. Full Address
      4. Social Security Numbers

Financial Docs:

1. Recent Bank Statements
2. Asset Statements (E.g. Vanguard, Fidelity, etc.)
3. Last Year’s Tax Return (Potentially)

Step 2: The Property Documents

So you have your personal information, company information, and financial documents ready to go. Now, it’s time to show the lender that you have a solid deal.

There are three basic elements that a lender wants to verify:

1. That You Actually Have a Property Under Contract

If a lender is marketing themselves, they are going to be inundated with requests for funding. They are not going to do a lot of work to analyze your deal unless they see a signed contract for purchase. Make sure that you have this ready to go.

2. That the Property is a Good Opportunity

So how do you show that the project is a good opportunity? You need to quickly show that the amount of profit you are projecting is worth the amount of work that the project requires. 

If you have to do $100,000 in repairs to earn a $10,000 profit, your lender isn’t going to like that risk. However, if you have to do $15,000 in work to make a $20,000 profit, the opportunity looks far more promising.

So how do you show your lender that you have a high-quality project? 

1. Have photos ready to go so that they can quickly review the project.
2. Have a detailed scope of work to go with the opportunity. A good lender will have enough experience in your market to know if your scope of work is in the ball park. 
3. Last, provide a list of comparable properties and sum up with your anticipated selling price. Altogether, you should have an excel sheet or document that details the profitability of the project.

If you want your lender to move fast, then you have to have cash ready to go. Your lender will typically have a commitment fee, also known as an appraisal fee, which you pay upfront to have your property inspected by a real estate professional or a member of the lending company.

You may be thinking, do I really have to fork out cash before I know I’m going to get funded? The simple answer is “Yes”. I encourage you to think about this from the lender’s perspective. 

If you aren’t willing to pay $400 – $500 to get funding so that you can make a $10,000+ profit, what does that say to the lender about the borrower’s financial position or their confidence in the project?

It probably says that they either aren’t confident enough about the project to put any money in the deal or they are tight on funds. Neither are good for a lender.

Recap: When it comes to property information, you want to make sure you have the following items ready to go to get your project funded:

1. Signed Contract for Purchase
2. Photos of Property
3. Scope of Work
4. Comparable Properties
5. Excel Sheet or Document that Details the Profitability of the Project
6. Cash for the Commitment Fee (~$400 – $500)

So there you have it!

The quick and easy way to get funding fast is to establish processes for collecting project information fast so that you can deliver this information to your lender quickly and seamlessly. 

This information is likely going to be required for any deal you do, so start implementing these deliverables in your processes today.

If you have any questions about getting your deals funding fast, feel free to reach out to the team at Sharper Capital Partners.

Your friends at Sharper Capital Partners,

Chris and Grant