- 1). Consider your lender's point of view. They're in business to make money. If they're going to hand over a bunch of money, they want to have some reasonable assurance that they're going to get that money back. By providing them with a real estate exit plan, you're proving that you've thought through the investment and have a plan to make money.
- 2). Write to reassure. If the lender wants to know with certainty that they'll get their money back, start the exit plan by describing why the property is a bargain. Cite the price you're getting for the property, comparable sales prices, comparable dollars per square foot, under-market rents if the current owner has been slack in raising prices with the market--any statistic that will demonstrate the value of the property.
- 3). Describe your method for making money. Once you've established the property's value potential, explain your strategy for realizing that value. If you intend to rehab, describe the necessary repairs, a timeline for completing the work and how you plan on covering the costs of those repairs. If you want to hold the property, show how the rent will cover your costs. You may also show your plan for increasing rent.
If you have multiple plans in case one fails, describe each one and state when each will be implemented ("I will rent the house if it doesn't sell after 60 days on the market," for example). - 4). Include proof that you can manage the debt if the asset doesn't perform according to your plan. This may be in the form of a bank statement showing that you have money in savings or a business profit and loss sheet that shows plenty of cash flow.
- 5). Summarize why the investment is secure and point out the great opportunity that the lender has to make money on the deal.
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