Lender · Boynton Beach, FL · Member since 2026 · 240 posts · 111 votes
I have been on the lending side for a while now in Boynton Beach, and I keep seeing the same thing happen. A deal looks good. The numbers work. The buyer is ready. Then it falls apart in the last 10 days, and it is almost never because of the rate.
It is usually one of these 3 things: The rent number was guessed, not real. Someone used what they hoped to get, not what the market actually pays.
The bank statements do not match the story. The investor says the property cash flows, but the deposits tell a different story. Or the buyer waited too long to get the paperwork together, and then they are rushing at the end. I have seen a STR in Florida that looked great on Airbnb, but the 12 month deposits were all over the place. And I have seen a long term rental that looked boring on paper, but the deposits were clean every month and it closed easy.
I am curious, from the investor side, what has killed a deal for you at the last minute? Was it the lender, the numbers, the seller, or something else?
I am trying to see if what I am seeing on my side matches what you guys are seeing on yours.
This is a really useful list, especially the point about the bank statements not matching the story. I think a lot of investors are surprised that the deposits carry more weight than the listing or the pro forma, and your two examples show it perfectly: the STR that looked great on Airbnb but had deposits all over the place, and the boring long-term rental that closed easily because every month was clean.
I'm not an investor myself, so I can't add a deal of my own to your list. I spend most of my time on the operations side, though, and what you're describing sounds familiar from there too. Most of these surprises were sitting in the documents the whole time. The rent figure and the deposits just never got put side by side until underwriting did it.
If I were an investor heading toward a closing today, I'd do that comparison myself before the file ever goes in: pull the 12 months of deposits, line them up month by month against the rent roll or the booking history, and write a short note beside any month that doesn't match. It's an afternoon of reading, and AI can do the matching part in minutes, but it means the investor finds the gap in their own spreadsheet instead of hearing about it from the lender ten days before closing.
You nailed it. The rent figure and the deposits not matching is what I see the most. The listing says one thing, the pro forma says another, then the bank statements tell the real story. I like what you said about pulling the 12 months of deposits and lining them up month by month against the rent roll. That is exactly what we do. Most people do not want to do that work before closing, then they are surprised 10 days before. From the ops side, do you see that more on the STR side or on the long term side? I feel like STR is where it gets messy, because the deposits are all over the place.
Hey Muyees, I'm still learning creative finance here in San Antonio. The deals I've looked at have slowed down most when the seller and I aren't on the same page about how the payments work. Once that part is clear, everything else moves a lot easier.
Yeah, I see that too. When the seller and the buyer are not clear on how the payments are actually going to work, everything else slows down. Once that part is clear, the rest moves a lot faster. On those creative deals you are looking at in San Antonio, what has been the biggest sticking point for you? Is it usually the seller not understanding the structure, or is it more the numbers not working once you get into it?
Good question. For me it has mostly been the seller not understanding it yet. Once we talk through how the payments work in plain terms, I can usually tell pretty quick if the numbers work. If the seller is not comfortable with it, the numbers almost do not matter.
Chris, that makes a lot of sense. Yeah, if the seller is not comfortable, it does not matter how good the numbers are. They are going to walk, or they are going to get scared halfway through. I see the same thing from my side. When I am looking at a creative deal, the first thing I try to figure out is, does the seller actually understand what they are agreeing to? If they do not, it usually falls apart later, even if everyone wanted it to work. When you are explaining it in plain terms, what do you find works best? Do you walk them through it with just the monthly payment, or do you have to go through the whole picture, like how long, what happens if they need to get out, all that stuff? I am curious because I feel like that is where a lot of people get stuck, they explain the payment but they skip the exit part, and then the seller gets nervous.
I walk them through the whole picture, not just the payment. How long it runs, what they get each month, and what happens if either of us needs to get out. If I skip any of that they can tell, and that is when they get nervous. I keep it plain and let them ask whatever they want before we talk numbers again.
Chris, that makes sense. Whole picture, not just payment. How long, what they get each month, and what happens if either side needs to get out. If you skip that exit part, that is when they get nervous. I see the same thing. Once the seller understands the exit, they relax. The numbers matter, but the clarity is what actually closes it. Do you find most sellers in San Antonio are open to creative once you walk them through it like that, or do a lot still just want cash and out?
Good question, and the honest answer is most start out wanting cash. A good share stay there too. The ones who stay open are usually the ones who care more about what they get each month, or when they get out, than about one lump sum. I just ask what they need the money for and when they need it. That tells me pretty quick whether it is worth walking through the rest. If it is cash only, that is fine. I thank them and move on.
Chris, I tried to send you a connection here but it is not going through. Can you send me one when you get a chance? I did not want to keep asking questions in the thread. Appreciate all your answers man, you have helped me a lot.
Appreciate that, Muyees — that means a lot. I'm at my connection limit right now, so I can't send one until a spot opens up, but I'll send it as soon as I can. And happy to keep talking through the questions here anytime.
Appreciate you Chris, no wahala at all on the connection. I understand the limit. Thank you for dropping your number, I will not blow it up. I will only reach out if I get a San Antonio creative deal that really fits.
Muyees, you are right on the rent number. That is the one that kills most of my deals before they ever get to a lender.
I buy Memphis single-family under $100K, ARV $180K-$265K, and I need Section 8 rent of $1,395-$1,950 for a 3BR+. I run everything on the 1% rule first. If the rent is guessed, or it is a market rent with no lease behind it, the DSCR math falls apart. At 70-80% LTV on about a 30-year amortization, the rent has to cover the payment, taxes, and insurance with room left over. If it does not, I walk.
The other killer for me is the appraisal coming in under the ARV after rehab. That changes the refinance number and the whole BRRRR exit.
My bottleneck is not money or contractors. It is finding deals that actually meet those numbers.
James, appreciate you jumping in, man. You are exactly right. That rent number being guessed is what I see kill it before it even gets to me. Someone sends me a deal, the pro forma says $1,900, then I look at the lease or the market comps and it is really $1,500. At that point the DSCR math just does not work, no matter how good the rest of the file is.
I like how you run it, the 1% rule first, then the real rent has to cover payment, taxes, insurance, with room left over. That is clean. A lot of guys skip that second part. They get the rent, but they forget taxes and insurance went up, and then they are tight at 70-80% LTV.
The appraisal point you made is real too. I see that on BRRRRs all the time. The rehab is done, the rent is there, but the appraisal comes in under the ARV and the whole refi changes. The borrower did everything right, but the exit number moves on them.
On those Memphis deals you are buying under $100k, when you are checking rent, are you mostly going off the actual Section 8 lease you have in place, or do you underwrite it off the Housing Authority payment standard first and then confirm it? I ask because I see a big difference between market rent with no lease, and Section 8 rent with a lease behind it. The second one holds up a lot better on a DSCR file.
And on the bottleneck part, finding deals that actually meet those numbers, are you seeing it get harder because sellers are still pricing off the old ARV, or is it more the rent not keeping up with taxes and insurance?
Mike, appreciate you jumping in. This is the part of creative that does not get talked about enough. Everyone talks about the structure, but nobody talks about how the seller actually feels about the structure. From your side in Oregon, are you seeing the same thing? Where the deal falls apart not because of the numbers, but because the seller did not fully understand what they were signing up for?
Diligently sifting through the financials and bank statements from the start will obviously prevent a lot of these deals from falling apart because they won’t get that far.
If I were you, I’d set the expectation from the start that the books need to be reviewed and reconciled before clearing hurdles
Most of my deals have been residential so the bank isn’t looking at the asset. They’re looking at me.
As I scale into commercial, I’ve been submitting LOIs on mobile home parks. These deals are their own animal. Lot rent vs park owned home income. Land value vs mobile home value.
Thankfully, I have a few partners who’ve navigated the MHP world and know what landlines to avoid.
Thanks Joseph, you said it right. If you catch the bank statements early, the bad deal no go even reach far. I like how you put it, set the expectation from the start that books need to be reconciled before we clear hurdles. That saves everybody time. And mobile home parks, yeah that is a different animal completely. Lot rent vs park owned, land value vs home value, if you miss that you go underwrite am wrong. Good you have partners who have been through it.
Muyees, still holding you first in line on my end. My pending list is still full at the cap, and the first slot that opens has your name on it. I have not forgotten you.