Craig Curelop, author of The House Hacking Strategy, suggest that you find a lender that lends locally. Why is that? I'm in San Diego. Why would it be advised that I not find a lender that lends in Las Vegas or Phoenix?
Using a small local lender that you build a relationship with makes the process easy. I send a quick email when I make an offer on a house and they immediately reply with the pre-approval letter. They know me and have other loans, so there is no approval process at this point and they will fund as fast as I need it and include repairs in the loan. This is just for one area I invest in and they are local to that area.
Experienced folks recommend local lenders because if you need to talk to them in person, that is available. Also, you are more likely to build a relationship with someone in your home town, rather than some big bank or corporation. Relationships are the name of the game, and a lender will know many other contacts they can refer you to - agents, contractors, title companies, etc.
Feel free to use a lender in Las Vegas or Phoenix, but if you are in this for the long haul, then I would go with Craig's advice. Find 1-2 banks that you can settle down with. It will make processing your loan applications quicker and potentially unlock more friendly financing later, like through portfolio loans.
Using a small local lender that you build a relationship with makes the process easy. I send a quick email when I make an offer on a house and they immediately reply with the pre-approval letter. They know me and have other loans, so there is no approval process at this point and they will fund as fast as I need it and include repairs in the loan. This is just for one area I invest in and they are local to that area.
It can be important in certain areas where houses don't fit the appraisal norms like older beach properties ( the house is worth $100k, the lot $600k). A local lender will understand the local market.
"and a lender will know many other contacts they can refer you to - agents, contractors,title companies, etc." Great point! Another person in the local funnel. A potential lead that can help cast a wide-local-net. Thanks for your insights @Dalyn Hazell
@Long G. Tran, one thing to know, it can also be important that your Realtor and Lender have a relationship.
For example, just this past week, I had someone reach out to me on BP and wanted to write an offer, he has a preapproval from a lender out of state, the listing agent asked how was the lending situation, and I honestly couldn't tell them because I never spoke with the lender, and the lender didn't return my calls in a timely manner. The agent appreciated my honesty, and asked about my preferred lender. We built great rapport, and of course they suggested my lender be involved. Long and behold we are opening escrow tomorrow.