How Early Do You Arrange Financing?

Question

Do you typically arrange financing:

A) Before searching for properties?

B) Once you find a potential deal?

C) After getting under contract?

D) Somewhere in between?

I'm curious how investors balance having financing ready with not wanting to over-prepare for a deal that may never happen.

Travis Main · Answer

As a lender, for us, B is really the ideal time.

It’s helpful to have the financing relationship established before you start looking, so we already understand your credit, liquidity, experience and overall investment strategy. But once you identify a potential property, that’s when I want to be involved, preferably before you make the offer.

We operate a little differently than lenders who are primarily there to provide a rate and terms once a property is under contract. We take a much more consultative approach with our investors.

Before you make an offer, we can help assess whether the property is actually financeable, how much cash you’ll realistically need, whether the proposed financing fits your investment strategy and, just as importantly, whether the deal makes sense in the first place.

On a flip or BRRRR, for example, I’m looking at the purchase price, rehab budget, ARV, leverage, projected margin and exit strategy. On a rental, we can look at the expected rent, DSCR, expenses and potential long-term financing before you commit.

There have absolutely been deals where I’ve told an investor that we could finance it, but I didn’t think they should buy it. I’d much rather have that conversation before someone is under contract than simply provide loan terms afterward.

That’s one of the biggest benefits of working with an investor-focused lender. Financing shouldn’t just be something you figure out after you find the property. Your lender can be another set of experienced eyes helping you evaluate the deal before you make the offer.

Ken M. · Answer

Your Comment "not wanting to over-prepare for a deal that may never happen." is a curious comment to me.

That's what it's all about. The prepared are always the winner and you don't know when the deal will present itself. So, you have no option but to prepare. I prepare by knowing what can and can't be done with creative finance and it's a "game" to me to see how little I can safely put into a deal. I've bought a house for $10 using Subject To, but I knew what I was doing and I have substantial resources  It's not something I would do if I was untrained or broke, but being prepared is the key. I don't buy every house I could, some just don't make sense.

Nicholas Floyd · Answer

I’d say somewhere between A and B. The best position is to understand your funding options before you start seriously looking, so you already know what you could realistically qualify for and how quickly capital can be accessed.

For investors, I usually look at the entire capital stack—not just the property financing. Depending on the profile, business lines of credit and 0% APR business credit cards for 9–12 months can help cover things like earnest money, materials, contractors, marketing, or other business expenses while preserving cash for the actual acquisition.

Then once the right deal is identified, you can match it with the appropriate property financing instead of scrambling for capital after going under contract. Having the funding strategy mapped out early can make a big difference in both speed and negotiating power.

Mike Grudzien · Answer

"If my gun is not loaded, I'm not going into the jungle."

Erik Estrada · Answer

The earlier the better. It always shocks me when a client gets a property under contract first and then shops for the loan. Kind of crazy...

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