SPECIAL REPORT: HOW TO WRITE A HIGHLY EFFECTIVE COMMERCIAL REAL ESTATE LOAN EXECUTIVE SUMMARY by Charles Emeryy Commercial Real Estate Finance Consultant
2 NOTICE: You DO Have the Right to Reprint or Resell this Special Report! You May Also Give Away, Sell or Share the Content Herein ALL RIGHTS RESERVED. You have permission to sell or give away this report as long as it is not altered in any way, falsely misrepresented or distributed in any illegal or immoral manner. DISCLAIMER / LEGAL NOTIFICATIONS: The information presented within this Special Report reflects the views, ideas and opinions of the author as of the publication date. Due to the rate at which conditions and circumstances change, the author reserves the right to alter and update his opinions, views, and ideas based upon new conditions and circumstances. This report is for informational purposes only. While every attempt has been made to verify the information provided within this report, neither the author nor his affiliates/partners assume any responsibility or legal liability for errors, inaccuracies or omissions. Any slights of people or organizations are purely unintentional. This report is not intended for use as a source of legal, business, or accounting advice. If you require advice concerning legal, business, or related matters, you should seek the services of a fully qualified professional. You should also be aware of any laws which govern commercial real estate financing or other related business practices in your country, state, or municipal jurisdiction.
3 ABOUT THE AUTHOR The author of this special report, Charles Emery is a Commercial Real Estate Finance Consultant with Commercial Real Estate Loans USA, a Philadelphia, PA based commercial real estate finance consulting firm that connects worldwide Clients with from $250,000 to $1 Billion ($500 million per project phase) in the ideal combination of private commercial mortgage loans and private equity capital financing to fund your commercial transactions quickly & efficiently. Prior to his entrepreneurial endeavors, Charles worked as a Commercial Credit Analyst at a large Philadelphia area regional bank where he provided Commercial Lenders with financial, business and industry analysis reports, upon which those Loan Officers based their commercial loan funding decisions. He also performed marketing & sales calls along with new business prospecting as part of his overall commercial lending related work responsibilities. Commercial Real Estate Loans USA provides you with private commercial mortgages and joint venture equity capital financing to viable businesses across a wide range of real estate sectors including multifamily, office buildings, plus oil, gas, and alternative energy existing facilities & development projects via various commercial funding methods including commercial bridge loans and commercial construction financing. We furnish you with the most suitable combination of commercial real estate loans and joint venture equity capital funding for your project. In many cases, we fund deals that traditional commercial lenders won t even touch! The bottom line? We empower you with the capital financing muscle to get your commercial real estate deals done virtually hassle-free with amazing speed & efficiency even during tough economic times. Plus, as our Client, we strive to provide you with prompt, courteous, world-class service before and after we get your commercial real estate projects financed in record time so you have the potential to close a higher volume of purchase transactions within any given time-frame. Once you read and digest this thorough and comprehensive Special Report from start to finish, and then you actually apply the information you learn right away, you will be much better prepared to write a highly effective commercial real estate loan executive summary that will empower you to get your next commercial project financed with the utmost speed and efficiency.
4 How To Write A Highly Effective Commercial Real Estate Loan Executive Summary Although you will certainly have to complete and submit other documentation including a Loan Profile and financial statements, the Executive Summary the most crucial document because it s equivalent to your virtual bull-horn; your opportunity to pitch your commercial real estate investment project in writing to potential commercial real estate lenders, joint venture equity capital partners, and private financiers. However, for many business people, although their verbal sales pitch rolls of their tongue with the greatest of ease as smooth as silk, when it comes down to putting their sales pitch in writing, they seem to suffer from acute penmanship paranoia. So, if sitting down to actually write your highly effective commercial real estate loan executive summary is a major challenge for you, then I ve written this special report just for you to let you know that yes you can organize your thoughts and put them all in writing when you take the following simple steps Executive Summary Guidelines: The basic components of the executive summary are: 1. Project Overview (Exactly what is your project?) 2. Income Summary (What s your project s annual Net Operating Income [NOI]?) 3. Principal Bios (What s the experience of each Principal pertaining to project?) 4. Principal Net Worth (What s the net worth of each individual Principal?) 5. Sources & Uses of Funds (How much do you need & how will you allocate it?) 6. Principal Investment (How much money will you invest in your own project?) 7. Exit Strategy (How will you repay the loan or buy-out JV Equity Partner?) Now that you know precisely what the executive summary is supposed to contain, just go down the list and answer each question just like you would if you were face-to-face with your ideal financier. As long as you keep the actual content of your final draft from 1~3 pages, you ll be good to go! See the Sample Executive Summary starting on the next page. Please note that the information contained within the following example document is completely fictitious, so please just use it as a rough guide as you write your own executive summary to include in your commercial real estate loan package.
5 Prepared by: Jackie Bradford, Principal Project Overview EXECUTIVE SUMMARY PARADISE VILLA APARTMENTS SAN DIEGO, CA Our company, Bradford & Brown Investments LLC (BBI) will purchase the 250-unit Paradise Villa multifamily apartment complex in San Diego, California that BBI currently has under contract @ $21,250,000 contingent upon us obtaining suitable financing. Post-acquisition, we intend to add value via making various upgrades and renovations, plus amenities such as an in-house sports club with an Olympic-size swimming pool. Those value additions will serve to reposition the property toward a more affluent tenant base that will warrant across-the-board rent increases, which should raise the property valuation to over $25 million by December 31, 2013.) Income Summary Audited 2011 full-year Seller financial statements show that Paradise Villa generated total annual gross revenue of $2,754,630 from which it earned $1,487,500 in annual Net Operating Income [NOI], yielding a 7% cap rate (on par with comparable apartment complexes within a 10-mile radius of the subject property). Once BBI purchases this property using your commercial real estate loan proceeds, we will boost annual revenue to $3.7 million from which we will increase NOI to $2 million to yield a 9.4% cap rate due to the implementation of the above-mentioned strategies plus more efficient overall operating procedures that our management team will also implement. Principal Bios I intend to take on this project with one other Principal who brings a complementary skill set to the table. I graduated from McGill University in 2001 cum laude; earned Bachelor of Science degree majoring in Financing & Marketing. In 2005, I acquired a 20,000 square foot shopping center in Montreal, Canada for $1.7 million, which I operated with XYZ Real Estate Investment Co. until we sold it for $5 million in 2008. Principal #2: Bob Brown brings over 15 years of professional real estate experience to this project. He began his real estate career financing commercial real estate at Goldman Sachs in New York, NY. He has been working in multifamily apartment finance for the past 10 years in all phases of rental developments, from finding the land to making sure lease-up or sale of the units is done in accordance contractual obligations. In addition to arranging the financing for developments, Bob is responsible
6 for oversight of operations in our Las Vegas office. Bob earned a Bachelor of Science in Management Information Systems from the University of Nevada Las Vegas. Principal Net Worth My net worth is $5,537,000. Bob Brown s net worth is $12,695,000. Total: $18,232,000. Sources & Uses of Funds We seek a $19,000,000 commercial mortgage, to which we will add $4,250,000 of our own capital. We will allocate $17,000,000 toward the subject property acquisition; $1,000,000 for renovations, upgrades & improvements; $500,000 for salaries; $500,000 to cover certain closing costs, miscellaneous expenses, and budget overruns. Principal Investment In addition to the due diligence/cost of doing business charges for services rendered, we intend to inject $4,250,000 of our own money into this project. We do not seek equity financing for this project. Exit Strategy Since we will strive to maintain a debt service coverage ratio in excess of 1.5, we intend to repay the loan proceeds via cash flow from operations. How To Write A Highly Effective Commercial Real Estate Loan Executive Summary Even If You Can't Write Well? If you know your business and your commercial real estate project inside & out, yet you either think or know that you can t write well, this is the fastest and easiest way I know of to write a highly effective commercial real estate loan executive summary anyway. Turn on your digital recorder microphone and either ask yourself or have someone (friend, spouse, business partner, etc.) ask you the 7 questions, which I ll rehash below: 1. Exactly what is your commercial real estate project? 2. What s your project s annual Net Operating Income [NOI]? 3. What s the experience of each Principal involved pertaining to your project? 4. What s the net worth of each individual Principal? 5. How much & what type of financing do you need & how will you allocate it? 6. How much of your money will you invest in your own project? 7. How will you repay the loan or buy-out JV Equity Partner?
7 As you answer each question out loud into the microphone until you are done, you will now have recorded the basis for your executive summary! As you answer question number 1, you will have completed your Project Overview section. Then, just continue all the way down to number 7, and before long, you ll be done the Exit Strategy portion of your executive summary pretty much like magic! After you re finished recording your whole executive summary, you can either playback, pause, and type it out yourself, or you can Google a company called Tech-Synergy that will transcribe your document for you. The last time I checked, their transcription rates were about $60 to $90 per audio hour, which I imagine is a relatively miniscule proportion of the total commercial real estate financing that you seek. So, What Are You Waiting For? Go For It! In life, we either make money or excuses. Many of our potential Clients use the apparent difficulty of the Executive Summary as an excuse not to submit their commercial finance documentation. Now that you know how easy it is to write a highly effective commercial real estate loan executive summary, you have no more excuses! As professional hockey legend the great Wayne Gretzky so eloquently reminds us: You miss 100% of the shots you never take That applies to sports as well as our lives in general. Unless we strive to give whatever we do an honest effort, it s tough to succeed at anything. So, it s wise for you to go on over to Commercial Real Estate Loans USA then hit the <GET FUNDED NOW> link right now and just give it a shot Here s to your outstanding success! Charles Emery http://www.commercialrealestateloansusa.com