RCRE - Understanding Your Personal Financial Statement

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Jake & Gino

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4.9 • 842 Ratings

🗓️ 26 August 2020

⏱️ 15 minutes

🔗️ Recording | iTunes | RSS

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Summary

Will Coleman and Mike Taravella discuss personal financial statements. Key Information: A personal financial statement or PFS is an account of an individual’s personal assets and liabilities. Personal financial statement’s are used by lenders to evaluate whether a borrower has the net worth and liquidity to pay back a loan in the event that they were to default on their payments. A majority of lenders will require your net worth to be equal to or greater than the loan amount and for your liquidity to be enough to cover 9-12 months of debt service payments post closing. Scheduled Real Estate Owned (SREO): a list of all properties a borrower has an ownership claim in. Banks will put more emphasis on the net worth of a borrower and less emphasis on the SREO. Fannie Mae and Freddie Mac will put equal emphasis on your net worth and SREO. Expert Pro Tip: “Check out our resources to help you fill out your PFS!” Contact Information: miket@randcre.com will@randcre.com To register to invest with us: https://invest.randpartnersllc.com/invexp/accounts/login/ Rand CRE's Facebook: https://www.facebook.com/randcre Rand CRE's Linkedin: https://www.linkedin.com/company/randcre Rand CRE's Instagram: https://www.instagram.com/randcre

Transcript

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0:00.0	Welcome to the RANCRE show, commercial real estate with no stone left unturned.
0:10.0	Hey everyone, welcome to the RANDCRI show.
0:12.9	I'm your host Mike Tarvella with The Man, the Myth, the Legend.
0:16.5	Will Coleman, Will, how's it going?
0:18.4	Howdy, Mike?
0:19.0	Doing great.
0:19.5	Just running the marathon one step at a time.
0:21.8	Well, today's an intimate episode for the Rand series show. We're going to talk about PFS,
0:28.7	the three letters that not many people talk about in commercial real estate, but it's super important.
0:33.4	Will, what is a PFS? Yeah, so PFS stands for your personal financial statement.
0:39.3	And basically what it is, it's just a snapshot of your assets and liabilities, right?
0:44.3	So you've got one side that shows your assets, your assets being cash, stocks and bonds, the value of your life insurance, and just a quick subset, it would be
0:58.0	cash value of life insurance, any automobiles you have, any personal property, if you have,
1:03.9	all of your assets, anything that's worth value, on the other side, it shows your liability,
1:08.6	so any debt, any credit card payments you have, anything like that.
1:12.0	So it's a snapshot of just what you have in terms of your assets as well as your liabilities.
1:17.2	Absolutely.
1:17.7	So the big reason is that we're going through the bank wants to see is the equity piece, right?
1:23.7	So when looking at it, it's the cost basis.
1:26.6	I think a lot of people want to get appraisals.
1:29.9	I know we'll have mentioned art and be like, it's priceless to me, billions of dollars,
1:34.6	but you have to be realistic with it and have those appraisals.
	...

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