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Before you make a loan, the question is how much to borrow. This is the purpose of the financing plan, for your real estate projects as for all others. Explanation.

The real estate financing plan: what is it?

The real estate financing plan: what is it?

Definition: Real Estate Financing Plan

We could requalify the financing plan as rational analysis of your financial situation compared to your real estate project. The financing plan is generally in the form ofa painting. It presents on one side all of your financial needs related to your real estate project and on the other hand all of your available financial resources. Any home loan is based on and calculated from this financing plan.

This summary table allows you to highlight your needs. It takes stock of your real estate project. And it is from this one that you will define your real estate loan needs, and your debt capacities. Indeed, like all balance sheets, the principle is that the total resources are equal to the total needs. The mortgage loan balances the situation between resources and needs.

What is the real estate financing plan?

As a balance sheet of the financial situation, the financing plan must show on the one hand the balance sheet of the financial contributions and the other potential aids, and on the other hand the projected amount of the real estate investment.

In terms of resources, the financing plan shows:

  • Personal contribution in terms of available savings: ELP and other savings account
  • Potential aid: loan to the family for example
  • Products related to the possible sale of property (real estate or movable property)
  • Bank credit: to know the amount of mortgage needed

In terms of needs, in other words future expenditures, the financing plan shows:

  • The evaluation of the investment: purchase price, possible work, etc.
  • Miscellaneous expenses related to the investment such as notary fees

In other words, all the needs necessary for the good realization of your project.

Video Instruction: How to Get the Best Financing - Real Estate Investing Made Simple with Grant Cardone