What Financial Spreadsheets do I Need to Include in a RE Startup Business Plan?

Hey guys,

So I'm currently putting together a business plan to raise money for my RE Investment startup. I know what types of financial spreadsheets are included in a loan request for actual specific properties, but right now I'm currently asking only for startup funds from this particular lender for operational expenses. Also, any tips on what I can do to increase the plausibility of getting approved for this type funding?

Thanks!

 

C'mon guys... I know SOMEONE knows the answer!

Maybe I wasn't specific enough - this is a long term buy and hold play, so although selling property may be an exit strategy, the main source of revenue will be coming from long term leases.

 

Non-residential commercial - I'd prefer to pursue traditional financing (not equity) in the form of a business LoC.

I was going to include a profit-and-loss projection, a cash flow projection, and a break-even analysis. Would that suffice, or do I need to use something like this? http://teten.com/blog/2011/11/10/template-startup-financial-model/

Again, I'm not asking for funds for a specific deal yet - this loan request is just to get the business running, although I do already have some specific properties lined up - I just need to tie them up first. Thanks again for your help, guys.

 
Best Response
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Non-residential commercial - I'd prefer to pursue traditional financing (not equity) in the form of a business LoC.

I was going to include a profit-and-loss projection, a cash flow projection, and a break-even analysis. Would that suffice, or do I need to use something like this? http://teten.com/blog/2011/11/10/template-startup-...

Again, I'm not asking for funds for a specific deal yet - this loan request is just to get the business running, although I do already have some specific properties lined up - I just need to tie them up first. Thanks again for your help, guys.

Agreeing with @jackstraw001, if you're looking for cash to fund startup operations (even in RE compared to a high tech startup) without current CF and assets it's going to be very difficult to get any type of debt from an institution, even a hard money lender, so equity will be a more likely option. If you personally have assets you may be able to approach a bank and pledge those assets as collateral but that essentially means you'll be taking a second mortgage out on your house (or against pieces of deals you've done that aren't liquid and may be able to use but that'll start getting tough depending on how those LLC docs are written and anything outside of the hardest of the hard money lender will be hesitant to accept that as collateral because it's a pain in the ass and not worth to chase those down unless they're decent sized pieces of institutional sized deals, and then you probably don't need a loan anyway and if you do, you know the right people at banks to just give you one regardless).

So in reality if you're approaching a bank for an operating loan/line and do not have closed assets in the entity they'll be more interested in your personal balance sheet. Put a rudimentary P&L, BS and CF together but they'll all be pie in the sky projections anyway. If you're planning on doing deals you should have some equity investors lined up to invest in the deals themself so I'd approach your closest investor(s) and propose structured equity and plan to give up a piece of the GP.

 
undefined:
undefined:
Non-residential commercial - I'd prefer to pursue traditional financing (not equity) in the form of a business LoC.I was going to include a profit-and-loss projection, a cash flow projection, and a break-even analysis. Would that suffice, or do I need to use something like this? http://teten.com/blog/2011/11/10/template-startup-...Again, I'm not asking for funds for a specific deal yet - this loan request is just to get the business running, although I do already have some specific properties lined up - I just need to tie them up first. Thanks again for your help, guys.

Agreeing with @jackstraw001, if you're looking for cash to fund startup operations (even in RE compared to a high tech startup) without current CF and assets it's going to be very difficult to get any type of debt from an institution, even a hard money lender, so equity will be a more likely option. If you personally have assets you may be able to approach a bank and pledge those assets as collateral but that essentially means you'll be taking a second mortgage out on your house (or against pieces of deals you've done that aren't liquid and may be able to use but that'll start getting tough depending on how those LLC docs are written and anything outside of the hardest of the hard money lender will be hesitant to accept that as collateral because it's a pain in the ass and not worth to chase those down unless they're decent sized pieces of institutional sized deals, and then you probably don't need a loan anyway and if you do, you know the right people at banks to just give you one regardless).

So in reality if you're approaching a bank for an operating loan/line and do not have closed assets in the entity they'll be more interested in your personal balance sheet. Put a rudimentary P&L, BS and CF together but they'll all be pie in the sky projections anyway. If you're planning on doing deals you should have some equity investors lined up to invest in the deals themself so I'd approach your closest investor(s) and propose structured equity and plan to give up a piece of the GP.

Thanks, this is helpful!

 

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