Once a quarter I send out reports to my partners with updates on each of the deals we have together. This is a good way to keep them informed about what is going on, and makes sure we are on the same page as the deal moves along. The reports I create have a few simple sections:
nce a quarter I send out reports to my partners with updates on each of the deals we have together. This is a good way to keep them informed about what is going on, and makes sure we are on the same page as the deal moves along. The reports I create have a few simple sections:
- Status
- What has happened since last quarter?
- What are the next steps?
- Based on everything that has occurred to date, what is my best estimate of the eventual outcome? (exit type and probable timing)
- Financial overview
- How much funding was provided?
- How much has been spent so far?
- What is left in the reserve?
- Interest splits due to the JV
- Total amount due to the JV
- Quickbooks accounting data export
My conflicting goals for the reports are to provide as much information as possible, while being clear and concise, and not requiring too much of my time. The process I use to generate these has evolved each quarter. I’m becoming more efficient each time I generate these, although the number of reports I’m creating each quarter has grown… I think I’m converging on a good balance overall. Partners who just want to see the high level information can skim over that. Those who want to dig into all the details and learn more about the business have access to the Quickbooks data.
The main purpose of the reports is to keep partners informed. But there is also a significant benefit to me that may not be as obvious. Creating these reports is a good forcing function to look at each individual note on a regular basis. Sometimes deals are at or near the end of a forbearance / trial payment plan and it is time to process a loan mod. Reperforming notes may be approaching full seasoning and be ready to sell. Or other times a borrower may have missed a payment or there may have been a hicccup somewhere. If one of these events occurs I’m not necessarily going to receive an alert from the loan servicer or other vendor, and with a large portoflio they can be easily missed. The process of creating these reports helps me prevent things from falling through the cracks.
In future newsletters I’ll talk more about the accounting and some of the systems and processes I’ve been using to keep my portfolio on track. If you have specific topics or tools you are interested in please drop me a line.