If you have been reading my last few posts and started to put together your own bank book, you have likely discovered that it is not something that can, or should, be rushed. It takes time to pull together all of information needed. Plus, all of that information needs to look coherent and organized. The pieces of the book need to be put together thoughtfully and carefully so that you put your best foot forward when looking for other people’s money. To help you, I have listed some tips below that in my experience will help you do just that.
Leave Out Most Of The Tax Return
Tax returns, especially for the real estate investor, can be very convoluted and lengthy. Mine total well over 150 pages when you include all personal, corporate and state income tax forms. Placing all of these forms in your bank book can be unwieldy and expensive. Thus for introductory purposes, I only include the 1040 form (and form 1065, if you have them) in the book. These forms total at most a dozen pages or so and tell most of the story. The remaining forms are made available later if the potential lender wants or needs to see them.
In this way, the potential lender can review the most relevant information and is not overwhelmed with paper at first
References
Always include a section for references but think carefully about people you will use. References should be from those you have done business with as opposed to friends and family. References should be people who can and will vouch for you both as a person and as an investment risk.
Be sure you give your references the courtesy and ask if you can use them as a reference. Let them know upfront what you are doing and who might be calling. In this way you provide your references with a heads up and hopefully find out what they will say when they are asked about you.
Make It Easy
Many people do not like having a lot of paper around and would prefer to be able to review your information when they are on the go. You should therefore make it easy on your potential lender by having your bank book available in an electronic format. You can do this in a myriad of ways but two that have worked for me are jump drives and dropbox.
All of your files can be easily placed on an inexpensive jumpdrive. This drive can then be given to your potential lender in much the same way you would hand them a paper book. Your lender can then review the files at their convenience.
You can also provide a link to a dropbox account. This technique is even simpler in that all it takes is an e-mail to send someone the link. You do not even actually have to meet.
Make It Pretty
Neatness speaks volumes. If your book is well organized and put together, it will reflect well upon you. Always have a cover page and a neat folder or bender to put everything together. I like to use my corporate logo on my cover page.
If you really want to go above and beyond, make your book personal. Include a cover letter specifically addressed to your potential lender. Nothing makes a person feel better than when they feel that an extra effort has been made especially for them.
