Module 15 Tools

Lender A

Lender Name

Interest Rate (%)

Annual rate. 10-12% = competitive, 14%+ = expensive

Points (Origination %)

1-2 pts = fair, 3+ pts = high

LTV Offered (%)

Prepayment Penalty?

Draw Funding Speed

Personal Guarantee Required?

Lender B

Lender Name

Interest Rate (%)

Points (Origination %)

LTV Offered (%)

Prepayment Penalty?

Draw Funding Speed

Personal Guarantee Required?

Lender C

Lender Name

Interest Rate (%)

Points (Origination %)

LTV Offered (%)

Prepayment Penalty?

Draw Funding Speed

Personal Guarantee Required?

Decision Prompt:

After comparing, ask yourself: Which lender offers the best combination of low cost and flexibility? Can you negotiate any terms? Is walking away the better choice?

Check each box only if you've verified the term is acceptable:

No Cross-Collateralization

Lender cannot claim your other properties if this deal defaults

No Blanket Liens

Lien is specific to this property, not your entire business

Reasonable Prepayment Terms

No penalty or penalty shorter than expected hold time

Clear Default Definition

You understand exactly what triggers default and cure period exists

Draw Schedule is Workable

You can cash-flow the gap if draws are funded in arrears

Extension Options Exist

Clear path to extend if project takes longer than expected

All Fees Disclosed

No hidden fees. All costs clearly itemized

I Understand Every Term

No terms I can't explain to someone else

If any box is unchecked:

Do NOT sign until resolved. Ask questions. Negotiate. Or walk away.

GOOD: Borrower-Friendly Terms

Interest Rate 10% annual, simple interest

Points 1.5 points

LTV 75% of ARV

Prepayment Penalty None

Draw Funding 24-48 hours after inspection

Extension 3-month extension at 0.5 points

Why it's good: Low cost, flexibility, no traps

OK: Negotiable Terms

Interest Rate 12% annual

Points 2.5 points

LTV 70% of ARV

Prepayment Penalty 3-month minimum interest

Draw Funding 5-7 business days

Extension 1 point per month

Why it's OK: Standard terms but negotiate the prepayment and draw speed

PREDATORY: Walk Away

Interest Rate 15% annual, daily compounding

Points 4 points + $2,500 "processing"

LTV 65% of purchase price (not ARV)

Prepayment Penalty 6-month minimum + 2% penalty

Draw Funding In arrears only, 10+ days

Cross-Collateral Yes - all borrower assets

Default Immediate foreclosure, no cure period

Why it's predatory: Hidden fees, traps, designed for borrower failure

Module 15: Interactive Tools

Term Sheet Comparison Tool

Lender A

Lender B

Lender C

Term Sheet Red Flags Checklist

Flip vs Hold Decision Framework

First Deal Roadmap

Phase 1: Foundation (Weeks 1-4)

Phase 2: Deal Hunting (Weeks 5-12)

Phase 3: Due Diligence (2-4 weeks)

Phase 4: Close & Execute

Term Sheet Examples: Good, OK, Predatory

GOOD: Borrower-Friendly Terms

OK: Negotiable Terms

PREDATORY: Walk Away