Do You Build Relationships with Lenders for Referrals?

Question

I’ve been thinking a lot about the role lenders can play beyond just financing a deal. In some cases, lenders seem to have a front-row seat to investor activity—seeing who’s buying, who’s refinancing, and what types of projects are getting funded.

That got me wondering: Is it worth it for investors and businesses to build stronger relationships with lenders as a referral source?

• Have you ever received a deal lead, buyer, or even a contractor referral through a lending connection?
• Do you see lenders as purely transaction-focused, or do you try to build ongoing relationships with them?
• For those of you who lend or borrow often, what’s been your experience in terms of networking value?

Have you ever received a deal lead, buyer, or even a contractor referral through a lending connection?

Do you see lenders as purely transaction-focused, or do you try to build ongoing relationships with them?

For those of you who lend or borrow often, what’s been your experience in terms of networking value?

Curious to hear if connecting with lenders has added value for you outside of just getting financing done.

Doug Smith · Answer

The first people I call if we see a deal are people that use us as their lender regularly. We're certainly going to refer those deals to those who are giving us the business. I think we add a great deal of value as we've been investors ourselves for a couple of decades. We've been able to be valued advisors and I can't tell you how many investors we've helped bail of out jams when things to awry on a deal. It's not just referrals we lenders can help with.

Wendy Patton · Answer

I would say being a lender myself, that yes, I do see what is moving in the market....what people are paying.  What they are putting into a project, etc.  Also, maybe times I find deals they want, or visa versa..... networking is the key to every successful business person.

Erik Estrada · Answer

It definitely helps to have relationships with anyone in the real estate industry, not just lenders specifically. Think about it.  Realtors, Lenders, Contractors, Insurance Agents, Title Agents, Escrow Officers, etc.. all see distressed properties. If you are always top of mind and are actively buying in an area they service, they will definitely reach out to you.

Say you offer a referral fee or finders fee for any flipping opportunities, and stick to your word, most people will keep you in mind. I think where most people get it wrong is they expect people to hand them deals. You need to actively work your relationships, provide value and help others succeed first. Then you will get your deal.

Deborah Wodell · Answer

Honestly, in most cases it ends up being pretty transactional. Lenders are mainly focused on getting deals funded and closed, not necessarily on sending referrals or building long-term networks for investors. Some may drop a connection here or there if it aligns with their own pipeline, but I wouldn’t count on it as a steady source of referrals. If you’re working with lenders, I’d approach it with the mindset that their role is financing first and everything else is just a bonus.

Oleg Donets · Answer

@Ellisa Riddick building a partner network of your preferred vendors as well as networking with other industry pros is of huge value. In my community, I see many members (agents, investors, lenders, property managers, etc) often send each other referrals. But there is so much more you get from a strong network aside from referrals.

Jay Hurst · Answer

I send deals to my investors often. I see a ton of deal flow you mentioned so I have deals that come to me that I send out. Kinda of a wholesale function but I do not take a wholesale fee of course.

Leo Leiva · Answer

Partnerships is the only way to go in our business model. For this reason, we are very broker friendly when deals are brought our way. Of course, we all know how business works, especially with direct borrowers coming our direction, but being an outlet to a broker who can't fund a loan is something we take pride in. We are here to be a longterm partner and creating teams (in whatever capacity that may entail).

James Stout · Answer

Ellisa – good question. I’ve found the lender/investor relationship is usually transactional, but there’s a nuance. Most lenders don’t actively hand out deal flow, but the ones who’ve been around long enough often know who’s serious, who’s in over their head, and where projects are getting stuck. That information isn’t always shared directly, but if you build trust, sometimes opportunities slip your way.

Andrew Postell · Answer

@Ellisa Riddick thanks for the post.  I have been an investor for 25+ years now and while I am a lender as well, I've never received a deal from a lender.  Usually, relationships with lenders are transactional.  That doesn't mean there can't be an exception but by in large, our deals come from wholesalers.  Having a lender is a lot like having a title company or plumber.  It's ok to have your favorite but you need 3 others just in case.  Yes, I do have contractors and contacts and networking groups that I share with my clients...but I'm an investor.  So, that is really rare.  Most lenders are vendors and that's how I would recommend for you to treat them.