Funding Your Real Estate Deals:
Get You the Money You Want with a Solid Proposal

excerpt from The Millionaire Real Estate Mindset by Russ Whitney

Investing in real estate takes money. That's a reality. But it doesn't necessarily have to be a lot of money—or even your money.

Creative financing is a cornerstone of successful real estate investing. And the key to creative financing is knowing how to put deals together, understanding what makes lenders happy, and staying on top of trends and changes in the finance arena.

It's All in the Presentation

If you have a good real estate deal, you can find the money to finance it. Remember that lenders make money by loaning money—and if they're not making loans, they're not making money.

When you're looking for funding, be persistent and professional. Don't just try one or two traditional banks, get turned down, and then give up—that's not the millionaire mindset. Instead, do some research about your financial resources; find out where they are; learn how they operate and what they want to accomplish; and figure out what you need to do to be a revenue generating resource for them.

Many of today's active investors (like you) will be tomorrow's financiers. Think about what you would like to see in the way of information and documentation before you would invest in something. You'd want a solid, complete proposal that included all the facts about the investment, the variables, the contingency plans, and enough details on the background of the person managing the project to make you feel comfortable that she has the skills and experience to pull it off.

Put together a basic business plan for each project, and make that plan the core of your loan application. Here's what your plan for a single-family or small multi-unit property should include:

• An overview of the project, which is a one-page (or shorter) description of what you're doing.
• A statement about yourself—essentially, a resume in paragraph form that outlines the kind of work you do, what your background is, and why you are a stable and reliable person who can be trusted to repay this loan.
• Your financial statement listing your assets, liabilities, and net worth.
• Copies of your federal income tax returns for the past two years.
• A rent roll statement for the property, including the current and projected figures for gross monthly and yearly rents and expenses, presented in a format that allows the lender to clearly see the profit potential.
• A copy of your purchase offer that has been accepted by the seller.
• Repair estimates, if you are applying for a rehab or construction loan.
• Legal description and any other general information you have about the property that will demonstrate that you have researched it thoroughly.
• Photos of the property.
• Details of other properties you own, including before and after photos, as well as details of properties you have sold and what the profits were.

If you are applying to a traditional lender, this package would be presented with your loan application form. If you are dealing with a non-traditional lender, do a cover letter stating the amount of money you are seeking.

When you are just getting started, you won't, of course, have photos and information about other properties, which is all the more reason why your package has to be sharp.

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If you found this excerpt from The Millionaire Real Estate Mindset valuable, you'll want to read the entire book. In his always practical, easy-to-understand style, Russ Whitney explains how to develop the millionaire mindset and use it to achieve financial freedom through real estate investing. To order your copy, visit www.russwhitney.com/mindset.

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