Anyone Else Noticing Lenders Backing Out More Often Lately?
Lender · Sanford, NC · Member since 2024 · 348 posts · 116 votes
Anyone Else Noticing Lenders Backing Out More Often Lately?
Most Popular Reply
Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesQuote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy.
The second deal was a little less straight forward. The borrower showed us a tax return for 2023 that showed he had paid $2,050,000 for the subject property as this was the acquisition cost listed in the modified balance sheet as part of the corporate tax return. Since the loan balance was $595,000 we asked the borrower to confirm that he had paid $1,405,000 down when he purchased the property. He confirmed such in an email to me. However, as part of the final checklist we use, we asked for copy of closing documents when he purchased the property. Turns out he didn’t pay $2,050,000 - in fact he had no money in because he paid only $595,000 - with a “nebulous” promise and u recorded deed transfer back to the seller if he couldn’t cash out for more money.
I guess these borrowers have no problem committing fraud, and probably went to the next lender with a story about how I “left them at the table”.
38 Replies
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Just DSCR lenders changing their programs
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
@Jay Hinrichs yep - we work with many and experience and available cash are adding weight to their decisions as are location
many are not doing condos in Florida and one we know is out 100% on anything in Florida
7e investments53 Reviews
- 1yMike GrudzienPro MemberLender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
A good deal with good numbers for all will always be a good deal. BUT, per comments above, certain elements of the deal (condos in a hurricane zone), can change everything as lenders consider the "what ifs". In times of expensive money, formally small concerns loom large.
- Lender · The Carolinas · Member since 2025 · 16 posts · 8 votes1y
Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
You're right — I hear these stories all the time too. That’s exactly why it’s important to work with institutional lenders who offer rate locks and solid upfront underwriting.
Let’s connect.
-
- 1yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
It's actually very common in this space. This is why sometimes it is very helpful if you have that broker in your back pocket to pull some strings for you. Most of my book of business comes from fall outs.
LuxePrivate Investments LLC 572 Reviews -
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes1y
@Deborah Wodell I think we have been in and will continue to be in a market where financing is getting tougher. I am not talking weeks or months I mean a changing cycle that could be years,
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesYes, we are hearing that a lot and receiving lending requests where the lender killed the deal “at closing”.
Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy.
The second deal was a little less straight forward. The borrower showed us a tax return for 2023 that showed he had paid $2,050,000 for the subject property as this was the acquisition cost listed in the modified balance sheet as part of the corporate tax return. Since the loan balance was $595,000 we asked the borrower to confirm that he had paid $1,405,000 down when he purchased the property. He confirmed such in an email to me. However, as part of the final checklist we use, we asked for copy of closing documents when he purchased the property. Turns out he didn’t pay $2,050,000 - in fact he had no money in because he paid only $595,000 - with a “nebulous” promise and u recorded deed transfer back to the seller if he couldn’t cash out for more money.
I guess these borrowers have no problem committing fraud, and probably went to the next lender with a story about how I “left them at the table”.- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yYour comment: "We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy."
Quote from @Don Konipol:
Yes, we are hearing that a lot and receiving lending requests where the lender killed the deal “at closing”.Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy.
The second deal was a little less straight forward. The borrower showed us a tax return for 2023 that showed he had paid $2,050,000 for the subject property as this was the acquisition cost listed in the modified balance sheet as part of the corporate tax return. Since the loan balance was $595,000 we asked the borrower to confirm that he had paid $1,405,000 down when he purchased the property. He confirmed such in an email to me. However, as part of the final checklist we use, we asked for copy of closing documents when he purchased the property. Turns out he didn’t pay $2,050,000 - in fact he had no money in because he paid only $595,000 - with a “nebulous” promise and u recorded deed transfer back to the seller if he couldn’t cash out for more money.
I guess these borrowers have no problem committing fraud, and probably went to the next lender with a story about how I “left them at the table”.
Hilarious. Greed knows no boundaries.
That falls into the same group of people who claim they will be living in a property, to get a better interest rate. -
- Lender · Sanford, NC · Member since 2024 · 348 posts · 116 votes1y
Quote from @Ken M.:
Your comment: "We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy."Quote from @Don Konipol:
Yes, we are hearing that a lot and receiving lending requests where the lender killed the deal “at closing”.Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy.
The second deal was a little less straight forward. The borrower showed us a tax return for 2023 that showed he had paid $2,050,000 for the subject property as this was the acquisition cost listed in the modified balance sheet as part of the corporate tax return. Since the loan balance was $595,000 we asked the borrower to confirm that he had paid $1,405,000 down when he purchased the property. He confirmed such in an email to me. However, as part of the final checklist we use, we asked for copy of closing documents when he purchased the property. Turns out he didn’t pay $2,050,000 - in fact he had no money in because he paid only $595,000 - with a “nebulous” promise and u recorded deed transfer back to the seller if he couldn’t cash out for more money.
I guess these borrowers have no problem committing fraud, and probably went to the next lender with a story about how I “left them at the table”.
Hilarious. Greed knows no boundaries.
That falls into the same group of people who claim they will be living in a property, to get a better interest rate.Totally understand this. I’ve come across more shady situations than I can count—borrowers misrepresenting details, withholding key info, or trying to game the system. It’s frustrating, especially when it puts a legitimate deal (and time) at risk.
This is exactly why having a solid checklist, legal review, and lender who knows how to dig deeper is so important. At the end of the day, transparency protects everyone involved. Appreciate you sharing these real examples—it’s a good reminder for all of us to stay sharp.
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- Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Don Konipol:
Yes, we are hearing that a lot and receiving lending requests where the lender killed the deal “at closing”.Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy.
The second deal was a little less straight forward. The borrower showed us a tax return for 2023 that showed he had paid $2,050,000 for the subject property as this was the acquisition cost listed in the modified balance sheet as part of the corporate tax return. Since the loan balance was $595,000 we asked the borrower to confirm that he had paid $1,405,000 down when he purchased the property. He confirmed such in an email to me. However, as part of the final checklist we use, we asked for copy of closing documents when he purchased the property. Turns out he didn’t pay $2,050,000 - in fact he had no money in because he paid only $595,000 - with a “nebulous” promise and u recorded deed transfer back to the seller if he couldn’t cash out for more money.
I guess these borrowers have no problem committing fraud, and probably went to the next lender with a story about how I “left them at the table”.This is the biggest reason I'm seeing for deals falling apart in underwriting or getting declined at application. Borrorwers either arent qualified and fib about that a little bit, or it's straight up fraud/deception. In the past month, I've had:
- a borrower say that they have the cash for the downpayment, only for the sourcing on that downpayment to show that they didnt have it and that they planned to take a credit card advance
- a borrower refuse to provide a copy of a bank statement until after going under contract (without being preapproved), only for it to show the funds in the account were borrowered, at which time the borrower says "this is why I didnt want to have to give you this"
- a borrower claim that they were divorced when they werent actually divorced yet; they were "basically divorced" according to the borrower
- a borrower tell me that there was some "slight confusion" with their previous lender on a payment, when the reality was that they were 60+ delinquent due to having no cash
- a borrower claim they have "about a 700 score" for their FICO, when the reality is sub 600 due to mortgage lates and credit card chargeoffs
-
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Quote from @Patrick Roberts:
Quote from @Don Konipol:
Yes, we are hearing that a lot and receiving lending requests where the lender killed the deal “at closing”.Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy.
The second deal was a little less straight forward. The borrower showed us a tax return for 2023 that showed he had paid $2,050,000 for the subject property as this was the acquisition cost listed in the modified balance sheet as part of the corporate tax return. Since the loan balance was $595,000 we asked the borrower to confirm that he had paid $1,405,000 down when he purchased the property. He confirmed such in an email to me. However, as part of the final checklist we use, we asked for copy of closing documents when he purchased the property. Turns out he didn’t pay $2,050,000 - in fact he had no money in because he paid only $595,000 - with a “nebulous” promise and u recorded deed transfer back to the seller if he couldn’t cash out for more money.
I guess these borrowers have no problem committing fraud, and probably went to the next lender with a story about how I “left them at the table”.This is the biggest reason I'm seeing for deals falling apart in underwriting or getting declined at application. Borrorwers either arent qualified and fib about that a little bit, or it's straight up fraud/deception. In the past month, I've had:
- a borrower say that they have the cash for the downpayment, only for the sourcing on that downpayment to show that they didnt have it and that they planned to take a credit card advance
- a borrower refuse to provide a copy of a bank statement until after going under contract (without being preapproved), only for it to show the funds in the account were borrowered, at which time the borrower says "this is why I didnt want to have to give you this"
- a borrower claim that they were divorced when they werent actually divorced yet; they were "basically divorced" according to the borrower
- a borrower tell me that there was some "slight confusion" with their previous lender on a payment, when the reality was that they were 60+ delinquent due to having no cash
- a borrower claim they have "about a 700 score" for their FICO, when the reality is sub 600 due to mortgage lates and credit card chargeoffs
TOP TEN EXCUSES (I’VE RECEIVED) FOR NOT MAKING MORTGAGE PAYMENT
10. I thought my ex wife made the payment
9. I already made 12 payments last year
8. I’m thinking of selling the property
7. My dog needed his teeth cleaned
6. My tenant stopped paying the rent
5. I was out of town and didn’t have access to my finances
4. The bank froze my funds because I’m a vegetarian
3. I kinda sold the property and the guy who kinda bought it was kinda supposed to pay the mortgage
2. The electric bill came in kinda sudden last month
1. I need to rebalance my checking account before I can consider paying any bills
-
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Don Konipol:
Quote from @Patrick Roberts:
Quote from @Don Konipol:
Yes, we are hearing that a lot and receiving lending requests where the lender killed the deal “at closing”.Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
-
What did you do?
-
Do you have backup lenders lined up, or a plan B?
-
Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
We actually backed out of two deals recently when we found out that the borrower lied or fabricated information. In one he checked the box on the application that said he or no entity he was involved with had ever file for bankruptcy. When our attorney ran a final check before closing we found out that he was IN bankruptcy.
The second deal was a little less straight forward. The borrower showed us a tax return for 2023 that showed he had paid $2,050,000 for the subject property as this was the acquisition cost listed in the modified balance sheet as part of the corporate tax return. Since the loan balance was $595,000 we asked the borrower to confirm that he had paid $1,405,000 down when he purchased the property. He confirmed such in an email to me. However, as part of the final checklist we use, we asked for copy of closing documents when he purchased the property. Turns out he didn’t pay $2,050,000 - in fact he had no money in because he paid only $595,000 - with a “nebulous” promise and u recorded deed transfer back to the seller if he couldn’t cash out for more money.
I guess these borrowers have no problem committing fraud, and probably went to the next lender with a story about how I “left them at the table”.This is the biggest reason I'm seeing for deals falling apart in underwriting or getting declined at application. Borrorwers either arent qualified and fib about that a little bit, or it's straight up fraud/deception. In the past month, I've had:
- a borrower say that they have the cash for the downpayment, only for the sourcing on that downpayment to show that they didnt have it and that they planned to take a credit card advance
- a borrower refuse to provide a copy of a bank statement until after going under contract (without being preapproved), only for it to show the funds in the account were borrowered, at which time the borrower says "this is why I didnt want to have to give you this"
- a borrower claim that they were divorced when they werent actually divorced yet; they were "basically divorced" according to the borrower
- a borrower tell me that there was some "slight confusion" with their previous lender on a payment, when the reality was that they were 60+ delinquent due to having no cash
- a borrower claim they have "about a 700 score" for their FICO, when the reality is sub 600 due to mortgage lates and credit card chargeoffs
TOP TEN EXCUSES (I’VE RECEIVED) FOR NOT MAKING MORTGAGE PAYMENT
10. I thought my ex wife made the payment
9. I already made 12 payments last year
8. I’m thinking of selling the property
7. My dog needed his teeth cleaned
6. My tenant stopped paying the rent
5. I was out of town and didn’t have access to my finances
4. The bank froze my funds because I’m a vegetarian
3. I kinda sold the property and the guy who kinda bought it was kinda supposed to pay the mortgage
2. The electric bill came in kinda sudden last month
1. I need to rebalance my checking account before I can consider paying any bills
I was called to a lady's home who was in foreclosure and I always ask how what caused the situation and she replied, honestly. She had lost big at craps in Las Vegas.
I was at another place in foreclosure with a foreclosure sale date just a couple of weeks away. When I asked the woman what had happened since she and her husband both had high paying, steady jobs, she said she didn't want to discuss it and oh by the way "my husband doesn't know".
-
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- Lender · Pittsburgh, PA · Member since 2024 · 63 posts · 20 votes1y
Deborah - my company actually has a process that is contrary to most lenders. We underwrite all fix and flip deals up front before any commitment. We'll give out a rubber-stamped term sheet up-front so you can feel comfortable knowing we'll do the deal unless the house get's hit by a tornado (or some other catastrophe).
My fallout rate is unbelievably low because of this. Give me a shout if it's meaningful to connect. Good luck!
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yDo you use an appraiser to get ARV value or do you do "in house" appraising?
Quote from @Zach Berry:
Deborah - my company actually has a process that is contrary to most lenders. We underwrite all fix and flip deals up front before any commitment. We'll give out a rubber-stamped term sheet up-front so you can feel comfortable knowing we'll do the deal unless the house get's hit by a tornado (or some other catastrophe).
My fallout rate is unbelievably low because of this. Give me a shout if it's meaningful to connect. Good luck!
- Lender · Pittsburgh, PA · Member since 2024 · 63 posts · 20 votes1y
Quote from @Ken M.:
Do you use an appraiser to get ARV value or do you do "in house" appraising?Quote from @Zach Berry:
Deborah - my company actually has a process that is contrary to most lenders. We underwrite all fix and flip deals up front before any commitment. We'll give out a rubber-stamped term sheet up-front so you can feel comfortable knowing we'll do the deal unless the house get's hit by a tornado (or some other catastrophe).
My fallout rate is unbelievably low because of this. Give me a shout if it's meaningful to connect. Good luck!
Ken - we do what is essentially a desktop ARV comp underwrite. 100% free and comes back typically same-day. If the deal and borrower pass the sniff test, then the deal gets approved. Happy to walk you through it if you like.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yI buy properties "off market" using creative finance, without borrowing, but I know a great majority of people on BP rely on lending, so this is for them. They just don't know what questions to ask.
Quote from @Zach Berry:
Quote from @Ken M.:
Do you use an appraiser to get ARV value or do you do "in house" appraising?Quote from @Zach Berry:
Deborah - my company actually has a process that is contrary to most lenders. We underwrite all fix and flip deals up front before any commitment. We'll give out a rubber-stamped term sheet up-front so you can feel comfortable knowing we'll do the deal unless the house get's hit by a tornado (or some other catastrophe).
My fallout rate is unbelievably low because of this. Give me a shout if it's meaningful to connect. Good luck!
Ken - we do what is essentially a desktop ARV comp underwrite. 100% free and comes back typically same-day. If the deal and borrower pass the sniff test, then the deal gets approved. Happy to walk you through it if you like.
Good so far.
Is your ARV based on Solds, Listeds or something else? - Lender · Pittsburgh, PA · Member since 2024 · 63 posts · 20 votes1y
Quote from @Ken M.:
I buy properties "off market" using creative finance, without borrowing, but I know a great majority of people on BP rely on lending, so this is for them. They just don't know what questions to ask.Quote from @Zach Berry:
Quote from @Ken M.:
Do you use an appraiser to get ARV value or do you do "in house" appraising?Quote from @Zach Berry:
Deborah - my company actually has a process that is contrary to most lenders. We underwrite all fix and flip deals up front before any commitment. We'll give out a rubber-stamped term sheet up-front so you can feel comfortable knowing we'll do the deal unless the house get's hit by a tornado (or some other catastrophe).
My fallout rate is unbelievably low because of this. Give me a shout if it's meaningful to connect. Good luck!
Ken - we do what is essentially a desktop ARV comp underwrite. 100% free and comes back typically same-day. If the deal and borrower pass the sniff test, then the deal gets approved. Happy to walk you through it if you like.
Good so far.
Is your ARV based on Solds, Listeds or something else?Makes complete sense, it's 100% based on Sold comps. Listings and valuation by square footage generally don't hold a ton of weight in the lending world!
- Lender · Sanford, NC · Member since 2024 · 348 posts · 116 votes1y
Quote from @Zach Berry:
Quote from @Ken M.:
I buy properties "off market" using creative finance, without borrowing, but I know a great majority of people on BP rely on lending, so this is for them. They just don't know what questions to ask.Quote from @Zach Berry:
Quote from @Ken M.:
Do you use an appraiser to get ARV value or do you do "in house" appraising?Quote from @Zach Berry:
Deborah - my company actually has a process that is contrary to most lenders. We underwrite all fix and flip deals up front before any commitment. We'll give out a rubber-stamped term sheet up-front so you can feel comfortable knowing we'll do the deal unless the house get's hit by a tornado (or some other catastrophe).
My fallout rate is unbelievably low because of this. Give me a shout if it's meaningful to connect. Good luck!
Ken - we do what is essentially a desktop ARV comp underwrite. 100% free and comes back typically same-day. If the deal and borrower pass the sniff test, then the deal gets approved. Happy to walk you through it if you like.
Good so far.
Is your ARV based on Solds, Listeds or something else?Makes complete sense, it's 100% based on Sold comps. Listings and valuation by square footage generally don't hold a ton of weight in the lending world!
This is 100% true. We always base arv from sold comps.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yCurrently in Phoenix, actives on the MLS are a lower price than recent "Solds" and it appears that will only get worse for a while.
Quote from @Deborah Wodell:
Quote from @Zach Berry:
Quote from @Ken M.:
I buy properties "off market" using creative finance, without borrowing, but I know a great majority of people on BP rely on lending, so this is for them. They just don't know what questions to ask.Quote from @Zach Berry:
Quote from @Ken M.:
Do you use an appraiser to get ARV value or do you do "in house" appraising?Quote from @Zach Berry:
Deborah - my company actually has a process that is contrary to most lenders. We underwrite all fix and flip deals up front before any commitment. We'll give out a rubber-stamped term sheet up-front so you can feel comfortable knowing we'll do the deal unless the house get's hit by a tornado (or some other catastrophe).
My fallout rate is unbelievably low because of this. Give me a shout if it's meaningful to connect. Good luck!
Ken - we do what is essentially a desktop ARV comp underwrite. 100% free and comes back typically same-day. If the deal and borrower pass the sniff test, then the deal gets approved. Happy to walk you through it if you like.
Good so far.
Is your ARV based on Solds, Listeds or something else?Makes complete sense, it's 100% based on Sold comps. Listings and valuation by square footage generally don't hold a ton of weight in the lending world!
This is 100% true. We always base arv from sold comps.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes1y
No changes we have seen in Milwaukee; I have not seen a single lender back out in the roughly 60 deals we have done YTD, but residential is also a lot more straightforward from pre-approval to loan commitment. And I could not say that I have seen a DSCR not closing either.
What I have seen are a LOT more cash offers, especially in the luxury segment. This is driven by 3 factors: mortgage rates are higher, the upside on Wall Street seems very limited right now, and the market for nice homes is very competitive and cash offers have an edge. Seems like people liquidate stocks and buy RE instead.
- 1yCharles ClarkBusiness MemberReal Estate Broker · Milwaukee, WI · Member since 2020 · 306 posts · 209 votes
Appreciate the insight! Good to hear Milwaukee’s staying solid—especially with that many deals closed. Totally makes sense on the cash offers too—high rates + limited stock market gains = real estate wins. Seeing the same trend in other competitive markets as well.
Raise the Standard RE LLC55 Reviews - Investor · Coppell, TX · Member since 2018 · 311 posts · 166 votes1yI only work with "non professional" private money lenders. Actually there has been an uptick in activity, specially from PMLs with SDIRA accounts.
Quote from @Deborah Wodell:
Recently, I’ve been seeing more and more posts from investors saying their lenders backed out—sometimes just days before closing. It’s happening more often nowadays, especially with fix & flips and other investment deals.
It’s tough to watch good deals fall apart after all the work that goes into finding and locking them up.
Have you had a deal fall through because the funding didn’t come through in time?
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What did you do?
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Do you have backup lenders lined up, or a plan B?
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Have you shifted toward DSCR, creative financing, or private money to avoid the risk?
Would love to hear how you’ve been handling this lately—your insight could help a lot of people here!
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- Real Estate Broker · Milwaukee, WI · Member since 2015 · 299 posts · 90 votes1y
I was a lending mgr for 5 years for a bank. I noticed too that underwriters were looking for a reason to say No vs Yes. A nationwide trend now is that properties are starting move downward on pricing and value. (not all markets however) Thats when they usually tighten up. It may take more equity to get one. But each bank has their own commercial lending dept and guidelines. Check around also ask your local investor association who would they recommend.
- Lender · Member since 2025 · 13 posts · 1 vote1y
Absolutely seeing this trend too, especially over the last few months. Had a deal in July where the lender backed out literally three days before closing — no warning, just a sudden change in their lending criteria. We had to scramble to find a bridge solution and ended up paying a premium just to salvage it.
Now I try to always have at least one or two backup lenders in the pipeline, but even that's tricky since underwriting standards keep shifting. I've also started leaning more toward DSCR and private money where the terms are more predictable and turnaround is faster — even if the rates are a bit higher.
It’s a tough environment, but it’s teaching us all to stay agile. Curious how others are adapting too — especially anyone finding creative workarounds that don’t kill the margins.
- Lender · Los Angeles, CA · Member since 2025 · 40 posts · 17 votes1y
We've been in the business for over 15 years now, and the most common reason for a deal falling apart is a borrower omitting critical information — or, in some cases, trying to pass off borderline fraud as fact.
As far as current trends go, many investors are steering clear of retail commercial properties. The brick-and-mortar retail space appears to be taking a significant hit.
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesnot only borrowers but intermediaries (brokers) as well. And then it goes one of two ways - either the borrower (or broker) slinks away with no further comment or they become indigent that it all your fault because you didn’t uncover their fraud “fast” enough; or you he previously produced a term sheet (based on the false information or non disclosure of pertinent facts by them), or you didn’t ask them specifically for the information they with held, or that shouldn’t be a criteria, or you’re discriminating against them, or a million other reasons meaning a affirmative action their “victim” status.
Quote from @Account Closed:
We've been in the business for over 15 years now, and the most common reason for a deal falling apart is a borrower omitting critical information — or, in some cases, trying to pass off borderline fraud as fact.
- Lender · Los Angeles, CA · Member since 2025 · 40 posts · 17 votes1y
Quote from @Don Konipol:
not only borrowers but intermediaries (brokers) as well. And then it goes one of two ways - either the borrower (or broker) slinks away with no further comment or they become indigent that it all your fault because you didn’t uncover their fraud “fast” enough; or you he previously produced a term sheet (based on the false information or non disclosure of pertinent facts by them), or you didn’t ask them specifically for the information they with held, or that shouldn’t be a criteria, or you’re discriminating against them, or a million other reasons meaning a affirmative action their “victim” status.Quote from @Account Closed:
We've been in the business for over 15 years now, and the most common reason for a deal falling apart is a borrower omitting critical information — or, in some cases, trying to pass off borderline fraud as fact.
Haha, I LOVE the “That shouldn’t be a criteria” or the classic “Why are you even asking for that? That’s not industry standard.”
Yes, by all means — please educate me (and the other investors funding the deal) on how we should be qualifying loans… 😂
- Lender · Sanford, NC · Member since 2024 · 348 posts · 116 votes1yI'm working on a deal now that was set to be processed but we had to put it on hold. Turns out the wholesaler didn’t even have a purchase agreement in place. It's always so boggling how people expect funding to go through when the basics aren’t even there. I’ve seen this more than once and it still surprises me. These kinds of situations slow everything down and waste time for everyone involved.
Quote from @Account Closed:
We've been in the business for over 15 years now, and the most common reason for a deal falling apart is a borrower omitting critical information — or, in some cases, trying to pass off borderline fraud as fact.
As far as current trends go, many investors are steering clear of retail commercial properties. The brick-and-mortar retail space appears to be taking a significant hit.
- Member since 2025 · 19 posts · 5 votes1y
Hello
As I work closely with lenders, the only time we pull out is if the borrower misstated their credit score, or liquidity ( not enough money to see the deal through). Even then I try to get creative.
But we’ve never dropped out for the sake of dropping out.Peter
- Real Estate Broker · Milwaukee, WI · Member since 2015 · 299 posts · 90 votes1y
When Real Estate starts trending downward lenders tighten up. They may end up in negative equity when the deal forecloses. I was a lending mgr for a major bank and my underwriters would challenge me on every deal!
- 1yCharles ClarkBusiness MemberReal Estate Broker · Milwaukee, WI · Member since 2020 · 306 posts · 209 votes
@Deborah Wodell
Yes, I've seen this happen more often too. Having backup lenders and exploring DSCR or private money has really helped me keep deals alive. Flexibility is key in today's market.Raise the Standard RE LLC55 Reviews- 1yZachary DealPro MemberLender · Member since 2023 · 464 posts · 425 votes
Quote from @Charles Clark:
@Deborah Wodell
Yes, I've seen this happen more often too. Having backup lenders and exploring DSCR or private money has really helped me keep deals alive. Flexibility is key in today's marketAgreed - going with a lender focused on investment property financing that values upfront due diligence, speed, and has flexible guidelines can be a huge difference maker in today's market.
- 1yNick BelskyBusiness MemberResidential and Commercial Broker · Member since 2021 · 1k+ posts · 704 votes
Not so uncommon in a volatile market. The lenders adjust when the market shifts or something happens. We've seen many stop lending in DMV, Baltimore, Chicago, and NYC all together, where others are limiting deals or terms in similar zip codes. Florida condos and LA condos have been hit hard too. Typically, we can find an alternative lender to finish up the transaction, but the terms change...
Cheers!
Belsky Mortgage, LLC527 Reviews - Member since 2025 · 19 posts · 5 votes1y
It is unfortunate. As a lender, if the client over exaggerated experience level or was significantly off with credit score, this would be an issue. However, this info would be vetted very early in the process, not days before closing. Appraisals can also be an issue. The appraised value might come in a lot less, so then we have to prove that the appraiser was way off. We usually get creative to get the borrower past the finish line.
Peter
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yYour comment: "The appraised value might come in a lot less"
Quote from @Peter Adamo:
It is unfortunate. As a lender, if the client over exaggerated experience level or was significantly off with credit score, this would be an issue. However, this info would be vetted very early in the process, not days before closing. Appraisals can also be an issue. The appraised value might come in a lot less, so then we have to prove that the appraiser was way off. We usually get creative to get the borrower past the finish line.
Peter
I agree that this is a common issue. Most people list at what others around them are listing for, but an appraiser is concerned about what actually has sold, generally within the last 3 months. Prices are headed down in several markets.
- Lender · Chicago IL · Member since 2020 · 357 posts · 229 votes1y
From my perspective, a lot of it comes down to how much due diligence is (or isn’t) happening at the very beginning.
When I was a borrower, nothing was more frustrating than thinking funding was solid only to have it pulled last minute. That rarely happened to me except once for a personal refinance on a building I developed as condos to sell but then decided to convert into long term luxury rentals. My initial lender backed out after working together on this for more than 45 days - UGH!
Now, as a private lender, I ask for everything up front and I MAKE THE DECISIONS. Purchase numbers, rehab scope, ARV comps, timeline, exit plan, borrower experience. If it doesn't make sense, I'd rather say no right away than drag someone along and pull the plug a week before closing.
One thing I do that maybe isn't as common: I stress-test the deal with the borrower before I ever commit. What if ARV comes in 10% lower? What if rehab runs 20% higher? What's Plan B if the flip doesn't sell in 6 or 9 months? Walking through those scenarios together tells me not just whether the deal pencils out, but how the borrower thinks under pressure. That piece is just as important to me as the numbers.
That’s why private money can be such a lifeline. We can not only move faster and be more flexible than banks or hard money (without skipping the groundwork). But I ultimately make ALL of the decisions instead of relying on a third party underwriter who may not know my borrower and my specific market like I do.
It protects me, but more importantly, it protects the investor from scrambling when a lender backs out late in the game.
- Real Estate Broker · Milwaukee, WI · Member since 2015 · 299 posts · 90 votes1y
They are tightening up underwriting now that the properties are starting to be discounted substantially on the open market. Banks learned their lesson during the recession and found buyers especially investments easier for buyers to walk away from leaving lenders holding the bag.
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