Getting pre-approved from a lender every 60-90 days?

Question

For all of you active real estate investors that want to be able to pounce on a deal as soon as you find it, I'm assuming you are always in good standing with a lender and have a pre-approval letter ready to submit with the offer. Does this require you to go through the pre-approval every quarter (give or take), and what is the ramifications of a hard pull on your credit four times a year?

I have nearly flawless credit but don't want to tank it by getting pre-approved unless I have a feasible property to move on, but I feel like it's a chicken vs. egg scenario. Thanks for any insights!

John Warren · Answer

@Matthew Battistini no I don't get pre approved every quarter. My lender is a huge part of my team, and I can just have a two minute conversation with him and he gets me the pre approval. This only works if you have a lot of trust of course, but he has done eight loans for me in five years so he probably knows my financial situation better than I do! Once I write an offer for a property, if I get the property under contract then of course he has to run credit at that point.

Cameron Tope · Answer

I operate in the same fashion as @John Warren - send the lender an email and within a day or so all is done. But this kind of relationship takes time.

Have you thought of getting pre-qualified? When you get pre-qualified you shouldn't have your credit pulled. You just provide rough numbers and they tell you about how much you can borrow.

Then once you build a relationship with your lender you'll be able to have a short conversation to get a loan.

Best of luck!