Has a Lender Ever Saved You From a Deal You Really Wanted?

Question

I usually think of lender conditions as one more obstacle. Another inspection. More reserves. A lower ARV. Repairs that need to happen before closing. But the lender is also one of the only people in the deal who has no reason to fall in love with the property.

Has a lender ever rejected a deal or cut the loan amount—and later you realized they probably saved you from a bad one? Or have they mostly gotten in the way of deals you knew were solid?

Erik Estrada · Answer

I guess it just depends on the context of the deal. If it is a creative purchase that involves looking at the deal in a non-traditional way I.E. rent by the rooms, commercial tenants, land value, or outside-the box homes, then it really comes down to pairing yourself with the correct lender for the deal beforehand.

If it is a straight forward long term rental and the numbers, value, etc.. just don't pencil out then you could save yourself a huge headache by getting declined on a loan.

I guess it just depends on the context. If say lender A requires 3 months reserves but you only have 1 month because you operate a business and are tight that month and you get declined then it could just be a matter of choosing the right lender.

If say your ARV value was slashed, it does not pass a desktop appraisal, and the rent analysis is low, then it could just be an overly optimistic deal that wasn't in your best interest.

Mike Grudzien · Answer

Not a lender, but my realtor.  Saved me from a couple of bad ideas when he did the analysis.