There are many lenders out there in the market place. The question is. Do you want to work with a lender who is experienced in the investing space or a lender who is just analyzing the deal. Everyone has a different point of view, so it all depends on what you're looking for.
The issues with closings or delays in most cases is not just the Bank or Lender. In most cases its the Buyer, Appraiser, or Seller (Some cases title). If we talk about residential primary home purchases it only take 15 to 20 days, DSCR should only take 15 to 20 days. When it comes to FHA or VA they can close in the same time frame if the 3rd parties are on point with no delays.
Commerical or 5+ units and up can take longer if there is No Broker, and the buyer is willing to supply all documents up front. Commerical is a bit tougher based on property types but in most ccases 45 days shouls be the normal turn time, unless its a $20M Hotel that has issues with occupancy, Reserve account requirements, legal pedning issues and more.
Hard money is quick and fast and can close in a 7-10 days with the right investor and fast up front 'Complete" application. Its also important to have your builder or GC submitted for approval with blue prints, PFS, and cost analysis (some cases more docs).
My opinion is investors jump from one loan officer to another loan officer rather than using the same Bigger Bank. This may not seem like an issue but lenders are limited due to certain things like having to broker out a loan, having to send out a file to a processor in a different state or office, and then to an underwriter in a different location.
This opens up the main function "communication" where the loan officer loses control of the loan/file and has to wait on another employee who logs in a 9PM and logs out at 5PM. Which then causes the milestones or each step to get dragged out due to (way too many people/hands) touching the file.
There is a process called ELA or Express Loan approval a buyer can ask for up front. This is when a buyer requests a fully underwritten loan. The Bank or some lenders will then fully underwrite the file while we leave the subject property as "TBD" and offer an actual "Loan Commitment" which with the right bank thats a gaurnatee to close in 15 days or less.
That also offers the buyer a better chance of getting their offer accepted even over a cash buyer in most cases if they are closer to ask. Realtors in this market especially moving into the next 6-12 months as rates trend down, should require an ELA to help avoid lost time and increase likelihood of a faster close and no extensions being requested.
@Kelly Schroeder when it comes to closing quickly I always use private/hard money and the best lenders come from local lenders in the market. Ok, maybe not EVERY time...but 99% of the time, the more local the better. And I'm guessing you are referring to "off market" properties in a state of disrepair? If it's on the MLS and it's someone's primary home - that's different. But if I'm using the BRRRR Method or targeting homes that cannot be sold on the MLS - then I need "alternative" financing to execute on those properties. And yes, private money and hard money is usually the ONLY option for those types of properties - especially if they have to close in less than 7 days (which commonly happens).
So, how do you find those lenders? This is a super important question and it doesn't just apply to lenders. How do you know that a contractor is any good? An electrician? A title company? Anything? Even if they do have 20 years experience...how do you know really? And while nothing is foolproof the most consistent method of finding good vendors is relying on OTHER real estate investors that have worked with those vendors. This is why we network with other real estate investors - kind of like what you are doing here!
You do have a "lender" link at the top of Bigger Pockets here...and maybe that might lead you to some good lenders but I would still recommend networking with investors, in your market, who have used other lenders and have firsthand knowledge of how they operate. So, let's try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. Some of those facebook groups have thousands of members. The priority is consistent recommendations from active investors. Oh, eventbrite too. But post locally for this. That’s the best bet.
There are many lenders out there in the market place. The question is. Do you want to work with a lender who is experienced in the investing space or a lender who is just analyzing the deal. Everyone has a different point of view, so it all depends on what you're looking for.
