What Makes a “Financeable” Deal in Today’s Market?
One of the biggest misconceptions in real estate right now is that every “good deal” is financeable.
In today’s lending environment, the deals getting approved usually have a few things in common:
* Strong cash flow or a clear path to it
* Reasonable leverage
* Clean exit strategy
* Realistic rehab numbers
* Borrowers with liquidity and reserves
* Markets with stable demand and rental activity
A deal can look amazing on paper, but if the numbers are too aggressive, the rehab is under-budgeted, or the exit depends on perfect market conditions, lenders are going to hesitate.
For DSCR and investor loans especially, lenders are paying close attention to:
* Debt service coverage
* Property condition
* Experience level
* Rent viability
* Market stability
* Time in project
One thing I’m seeing more often: investors who build multiple exit strategies into a deal tend to have a much easier time getting financing approved.
For example:
* Flip → Rental backup
* STR → Mid-term rental backup
* BRRRR → Conventional refinance fallback
The more flexible the deal, the stronger it looks from a risk standpoint.
Curious what others are seeing right now:
What’s the #1 reason you think deals are getting denied or approved in today’s market?