Memphis, TN · Member since 2017 · 2 posts · 2 votes
I've personally worked with a handful of "investor-friendly" lenders, primarily on DSCR loans in recent years, and each time I've run into significant delays, lack of transparency about the process, have been fed the requirements in a piecemeal fashion (every few days there's a new random request rather than having it all organized from the start), and have even run into lenders who were substantially misinformed about the real estate industry or the laws that govern it on both a local and federal level.
I think there should be a better site to encourage accountability by tracking how long it actually takes each lender to close their loans on average, and what unexpected hurdles investors encounter when trying to work with them.
I can't seem to find such a site. It would be great to have a timer to actually track reviewer's loan progress from start to close.
For me personally, I'd like to choose the lender who works the most transparently, efficiently, and overall professionally. What are your thoughts?
Lender · Winter Park, FL · Member since 2021 · 737 posts · 412 votes
2y
I understand the challenges you've faced when navigating the lending process. It's crucial to look beyond just the lowest rate offered on a verbal or preliminary basis. Finding a loan officer who comprehensively understands their underwriting guidelines and the nuances of real estate investments can significantly streamline the process and set clear expectations from the start.
In many cases, lenders operate in a structured manner where loan officers initiate the process and then collaborate with processors to gather necessary documents and address any underwriting revisions promptly. While the process may seem transactional, it's important to note that lenders are motivated to close loans efficiently, as they are compensated based on successful outcomes.
To gain insights into lenders' performance, consider checking reviews or seeking recommendations from credible sources like the BiggerPockets preferred lender page.
Accountability in lending is indeed a two-way street. While borrowers expect transparency and efficiency, lenders strive to provide upfront explanations and support to ensure borrower success and foster lasting relationships.
In the lending world, there's a common understanding that achieving all three qualities—fast, easy, and cheap—simultaneously can be challenging. By prioritizing open communication and clarity, we aim to deliver successful outcomes while building trust with our borrowers.
If you have any questions or would like to discuss further, feel free to reach out. Everyone here on Bigger Pockets wants investors to succeed and good lenders are here to assist you every step of the way.
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
2y
@Jerry Skefos how do we really know if anyone is any good - at any job? Hair Dresser, Plumber, anything! That is, until we work with them...we really don't know. Even if their reviews are good. Now, nothing is foolproof, but leaning on other real estate investors in your specific market still has the highest success rate out of anything. I wrote an entire post on this topic for Bigger Pockets that you can read HERE. Read through those strategies and that will help significantly.
should only be about 2 1/2 - 3 weeks to fund a DSCR loan . What are some of your scenarios looking like ? Are they direct lenders or brokers ?
Hey Jacob, Thanks that's what I've been told from a few lenders. However I've repeatedly been faced with situations in which closing is taking months... In my current case it's taken over 60 days. This is with a broker rather than direct lender. The only direct lenders I'd tried to work with early on were confused about how my investment fit into seasoning laws and erred on the side of extreme caution which also would have taken many months for a deal that didn't require any seasoning (which other lenders later confirmed). So as others have stated experience is definitely a key factor but I feel like across all of these experiences there are a number of inefficiencies at play.
However the fact that no investors have responded to my post indicates perhaps I've just had really bad luck.