Personal Financial Statement and REO Schedule for an Apartment Loan
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When you ask a lender for an apartment loan, the lender underwrites the property and the people behind it. Besides the deal, you will be asked for a personal financial statement (PFS) and a real estate owned (REO) schedule from each guarantor or key principal. New sponsors often send a rough spreadsheet and get delayed. This post lists what goes into both, how to present syndication holdings and what proof lenders ask for.
What goes into a personal financial statement?
| Section | What to list | Proof lenders often ask for |
|---|---|---|
| Cash and liquid assets | Checking, savings, brokerage, money market | Two most recent statements |
| Retirement accounts | Balance, noting that access may be limited | Latest statement |
| Real estate | Value and mortgage for each property | See the REO schedule |
| Business interests | Your ownership and a fair estimate of value | Entity documents, K-1s |
| Notes and other assets | Money owed to you, vehicles, other | Support where material |
| Liabilities | Mortgages, loans, cards, taxes owed | Credit report, statements |
| Contingent liabilities | Loans you guaranteed, lawsuits, tax disputes | Loan documents |
| Income and sources | Salary, rents, distributions | Tax returns |
Date it, sign it and use values you can support. Liquid assets matter most. Many lenders count liquidity as cash and marketable securities, not retirement balances or business equity, so ask how yours will be counted.
What does the REO schedule show?
For each property you or your entities own, list the address, type, purchase date, ownership percentage, current value, loan balance, lender, interest rate, maturity, monthly payment, annual income and whether you are a personal guarantor. Group holdings by entity and show your share. Lenders use it to see experience, leverage and where else you are on the hook.
How should you show syndication holdings?
If you are an investor in other deals, list the interest at a supportable value (often your invested capital or the latest valuation from the sponsor) and note it is illiquid. If you are a sponsor of a deal, list the property under REO with your percentage and say whether you guarantee the loan. Do not present your full gross asset value as your own. Show your share. See loan guarantor and co-sponsors and key principals.
What are the common mistakes?
- Leaving off contingent liabilities such as other guaranties.
- Counting retirement or illiquid assets as cash.
- Using the property's price as your net worth contribution.
- Stale statements. Lenders want recent ones, often within 30 to 60 days.
- Different numbers in different lender packages.
Our take
Build the PFS and REO schedule before you need them, and update them each quarter. A clean, consistent package reads as a sponsor who will also report cleanly to investors.
Trade-offs and who this is not for
- Not for choosing a lender. Requirements vary, so ask each lender what they need.
- Common mistake: rounding values up to meet a net worth requirement.
- Not a substitute for advice from your CPA or attorney.
Related guides: Lender checklist: borrower raising equity and Apartment loan timeline.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from friends and followers who already trust them, under Rule 506(b) or 506(c). We are software, legal document preparation, escrow coordination and verification services. We are not a law firm, broker-dealer, investment adviser, funding portal, bank or escrow agent, and we do not hold investor money: investors wire their money to escrow at Enterprise Bank & Trust, in the deal's name.
DoorRaise keeps the deal in its own company with its own documents and a deal page, and runs an accreditation check on every investor, in 506(b) and 506(c) raises. Flat fees, never a percentage of the raise (see pricing). Create your free sponsor page.
FAQ
What is the difference between a PFS and an REO schedule?
A PFS shows your whole financial position. An REO schedule lists the real estate you own and the debt on each property.
Do lenders require a particular net worth?
It varies by lender and loan. Many want net worth and liquidity tied to the loan size. Ask the lender for its written requirement.
Do I list investor money I am raising?
No. Money you are raising from investors is not your asset. List only your own assets and your ownership share.
Do all investors need to give a PFS?
Usually only the guarantor or key principal. Passive investors typically do not. Lenders may ask for owners above a certain percentage to be identified.
Sources
- Fannie Mae Multifamily
- Freddie Mac Multifamily
- 18 U.S.C. 1014, false statements to lenders
- 17 CFR 230.501
This article is general information, not legal, tax or investment advice. Lender requirements differ. Confirm with your lender, CPA and attorney. DoorRaise is not a law firm, lender, broker-dealer, investment adviser or funding portal.