Multifamily Investors: What's your worst lender experience?

[Kenneth Mendonca]

We all know lenders can be shady especially when it comes to re-trades, last minute bait-n-switches, unexpected closing costs, or the infamous "we'll get back to you in 24-48 hours" line. 

What has been your worst lender experience when financing a multifamily (specifically 5+ units) project? 

[Nick Belsky]

@Steve Vaughan

Ouch!  There are plenty of 30 year fully amortized loans out there to be had.  I think you are spot on.  Perhaps you should focus on a better originator or broker.  I've seen many a commercial loan go sideways due to genuinely unforeseen circumstances.  Us MLOs and Brokers are always the easiest to blame but it's not always our fault.  Let's be honest too, there are definitely bad ones out there.  Very bad ones... Many are quick to blame the lenders or broker but often many borrowers don't really understand how lending works on the backside and only report on what they see (which is rarely fully transparent).  

My humble opinion is to find a honest, transparent broker to work with.  They are rare, but they are out there.  

@Kenneth Mendonca

I can tell you my favorite borrower experiences!

"I have an 800 FICO, you don't need to pull my credit" - pull tri-merge and get a 635 mid score, then get blamed for pulling credit incorrectly.

"I've got 30% to put down, no problem" - get bank statements and they have less than 5% available.  Either "it's coming" or they are mattress stuffers and have cash on hand we can't use.

"I don't have insurance on the property.  Why would any lender make me have that?" - I get yelled at for this one and Title Insurance often.  I have no control nor does any other broker or MLO.

My personal favorite is when we get the appraisal back and the borrower's value was too high and they want to get another appraisal done at no charge since "my" appraiser was a bad one.  Then we get to closing and they decide to back out last minute because they want to wait until the market gets bettter.  Flash forward two months after rates go up significantly - "No, I want the old rate I had before.  Everyone else can get it for me, why can't you?"  

"But my tenant has lived here for 30 years.  Why do they need a lease?  That doesn't make sense."

"What do you mean you don't need my taxes and employment info?" - Get this one a lot too... Lol

It's funny how the original question can definitely go both ways.

If you're not having fun with this process, then you aren't doing it with the right people...  Lol.

Cheers!