Five financing situations and the kind of lender I send each one to

Five financing situations and the kind of lender I send each one to

Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes

Hi all, Rob here, a Louisville agent who works mostly with investors. Most deals I see die on the financing, not the property. Here's how I match the money to the deal.

Buying a rental and your W-2 doesn't tell the whole story: a DSCR loan, debt service coverage ratio. The lender qualifies the building's rent, not your W-2.

Need to close fast, or the property won't qualify for a regular loan yet: hard money. A hard money loan is a short-term loan from a private lender that funds fast based on the property, not your paycheck.

Own several properties and you're tired of juggling loans: a portfolio loan, one loan that covers several properties.

Own a building with a balloon coming due: a refinance before your balloon hits. Commercial lenders size a loan two ways, by the building's income (DSCR) and by value (loan-to-value), and you get whichever number is lower. If your date is inside the next 18 months, you have more options now than you will 60 days before it's due.

Taking over a seller's low-rate loan and there's a gap to cover: a second loan behind the assumed one. VA has published rules allowing it. For FHA, confirm with the servicer deal by deal. Or the seller carries the gap.

If you've got a trickier situation, the lenders I work with will flat out tell you what your best option is. No sugarcoating. And it's going to be the best option. But if there's a way and a will, we'll make it happen.

They're super well connected and resourceful, and they lend nationally, not just in Kentucky. If you need commercial money, a DSCR loan, a refinance before your balloon hits, a portfolio loan, whatever it is, ask below and I'll make the intro.

What's the hardest deal you've gotten financed, and who finally said yes?

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Steven LeeBusiness Member
Lender · 18021 Norwalk Blvd Suite 209. Artesia, CA 90701 · Member since 2015 · 488 posts · 43 votes
3d

Rob,

Are you venting because you’re having a difficult time getting financing ?

See this reply in the discussion

10 Replies

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  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    4d

    Is this advertising?

    • Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
      3d

      Not a lender.

  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    4d

    Should this be in the Classifieds?

    • Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
      3d

      Need help with something Mike?

  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    4d

    ...just sayin'....

  • Steven LeeBusiness Member
    Lender · 18021 Norwalk Blvd Suite 209. Artesia, CA 90701 · Member since 2015 · 488 posts · 43 votes
    3d

    Rob,

    Are you venting because you’re having a difficult time getting financing ?

    • Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
      3d

      No! lol

  • Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
    3d

    Mike, Steven, fair questions. I wrote this as a breakdown of how I match financing to a deal, not a pitch, and there's nothing for sale in the thread. If the "ask below" line reads like an ad to you, that's fair feedback, and I'd rather stay on the right side of the rules.

    Steven, I'm not venting. Most of the deals I see die on the financing, not the property, so I wrote down how I think about matching the money to the deal.

    You're both on the lending side, so I'd like to hear it from you. Of those five situations, which one do you see borrowers walk in the least prepared for?

  • Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
    3d

    Mike, Steven, fair questions. I wrote this as a breakdown of how I match financing to a deal, not a pitch, and there's nothing for sale in the thread. If the "ask below" line reads like an ad to you, that's fair feedback, and I'd rather stay on the right side of the rules.

    Steven, I'm not venting. Most of the deals I see die on the financing, not the property, so I wrote down how I think about matching the money to the deal. I'm an agent, not a lender, which is exactly why I'd like to hear it from the two of you.

    Of those five situations, which one do you see borrowers walk in the least prepared for?

  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    1d

    Seems like this is mixing and matching residential real estate and commercial as if they are just one asset type with the same financing options

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