Funding First or Deal First?

Question

Quick question for investors:Do you line up funding first… or find the deal first?Curious how everyone here approaches it.

Doug Smith · Answer

Have a discussion with a good, experienced lender first. They can likely do a soft pull on your credit or simply give them a MyFICO report or the like to give them an idea of where you would be. Give them a personal financial statement, a Schedule of Real Estate Owned and Experience, 2-3 months of your bank and brokerage statements to show liquidity, the mortgage statement, tax bill, hoa bill, and insurance (and flood if necessary) dec on every property you own. That will be most of what they need to submit a loan to underwriting if you're going flip, DSCR, or construction. If you're using more conventional financing, then you'll want to gather 2 years of W-2s, 30 days of paystubs, and, if you're self-employed or have rentals, 2 years of your complete business and personal tax returns. That would provide a very complete package...more than they really need...from from a lender's perspective, they will give you a really accurate picture and you'll be able to spring forward once you find something. You really need the lender to tell you if you can pull a deal off before you go shopping...and you'll be able to do so in confidence. One other note. Not all lenders know their poo. Some were flipping burgers last week, took a test, and now they are "experts" while others have multiple decades of formal credit background and hundreds of these types of loans under their belt. Visit their Linked In profile to see which type of lender they are. Good luck to you!

Marnit Brown · Answer

You're asking the wrong question honestly. Deal first, always. In 2026 with rates where they are, a deal that pencils at 7.5% conventional money will look terrible if you lock up expensive 12% hard money first and go hunting. I've seen too many new investors get funding, then force a bad deal because they're paying carry costs on capital they haven't deployed. Build your relationships with lenders now, but wait to actually pull the trigger until you find a property that cash flows on paper with realistic numbers. The money will be there for a good deal.

Phil Strauss · Answer

Agree with the others.  Get the lending first.  Shows you're qualified and ready to pull the trigger

Nathan Jensen · Answer

I personally think its usually best to start with a lender first and get a general understanding of what the financing for your strategy is going to look like before chasing deals.

A long term rental, BRRRR, flip, DSCR property, house hack, or STR can all have pretty different structures, reserve requirements, timelines, and exit strategies depending on the loan type.

I’ve seen investors waste alot of time analyzing properties that didnt really fit the financing model they were planning on using in the first place.

Having a rough gameplan upfront makes it alot easier to filter deals quickly and recognize when something actually fits the numbers and strategy your trying to build around.

Funding First or Deal First?

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