The Four Pillars of Financing

Profitability: do the numbers leave room?

Review the expected value alongside purchase, renovation, financing, holding and selling costs. Gross value spread is not profit. If costs are unknown, a complete profit or return estimate cannot yet be supported.

Credit: what is the borrower’s credit profile?

Credit is one part of the borrower profile. An estimated score helps frame the conversation, but requirements vary by capital source and transaction. A score alone does not determine the outcome.

Experience: who will execute the plan?

Relevant experience means similar projects completed and the sponsor’s role in them. It can strengthen a transaction, especially for renovation or construction. A newer sponsor can still discuss the deal and how the plan will be supported.

Liquidity: can the project keep moving?

Liquidity is cash or assets that can readily become cash. Review money available for closing, work before reimbursement, reserves and unexpected costs. A project can show an attractive value spread while still requiring substantial cash along the way.

Your quick checklist

• Bring the project economics, including missing costs.
• Describe similar projects honestly, even if this is your first.
• Separate available cash from money already committed elsewhere.
• Discuss credit details privately with Ben through an appropriate secure process.