What we have to organize information for our private lender funds is a good old fashioned computer program known as Excel. You have probably used Excel a lot in your day. Our administrative assistant Donna has mastered it.
In our office, each private lender has a page. What we record on the spreadsheet is how much money they’ve given us, the date they gave us the money and the property that the money is put on. It’s fairly simple.
When we repay them or we move the money to a different property, we record the information on their page. We double check to make sure that we’re filling in all the blocks and keeping track.
We did have a mess with Excel. Unlike some messes, we had fun cleaning this one up. It also demonstrates why I have systems.
The administrative assistant who used to work for me just wasn’t getting the job done. It started to show after a while. She was behind on the Excel spreadsheets and wasn’t keeping the reports up to date.
What Donna had to do was go back in and figure out what went where. Her job was tough.
This report wasn’t clean; the real estate promissory notes didn’t have the addresses on them. Donna had to sit there and spend a lot of time getting this thing up to speed.
Thank God, because you really don’t want your private lender coming to you and saying, “I think you owe me more money on those bank repo houses.”
So the message here is to have a system for your lender reports. You can use this for your quarterly report to the lenders.
We use it as an internal report in the office but it is set up so each tab has a private lender on it and we’ve color-coded it. The color code shows if they’ve been paid off or if they’re still active.
You know, just how you get your reports periodically from a bank that says here’s how much interest we’ve paid you. Well it’s the same thing here, but in reverse.
With this statement, you’re giving them the information about where they stand with you. It shows them where there money is and what properties it’s on.
It is a good idea to give the lender this statement every quarter. That allows them to raise the red flag if they have an issue. It makes it easier for you to reconcile any problem they have.