Build the lender bench before you need it

An investor with one lender has one set of guidelines, one appetite and one answer. That works until the deal that does not fit those guidelines arrives — and it always arrives inside a contract with a deadline. A bench is three to five lenders of different kinds, each of whom has already seen the investor's financial picture. A conventional lender for the properties that fit agency guidelines. A local bank or credit union that keeps loans on its own books and can make judgment calls. A DSCR lender that underwrites the property rather than the borrower. And, if the strategy includes renovation or auction purchases, a short-term asset-based lender. Building it is unglamorous: a conversation, a current package, and a question — what does your box look like, and where does it stop. The answer to "where does it stop" is the valuable part, because it tells the investor which deal to bring to whom before making an offer. Keep a standing package ready: two years of returns, a personal financial statement, a schedule of real estate owned with current values and balances, entity documents, and leases. Assembling it takes a day once and saves a week every time. The relationship is also information. A local banker who has watched an investor close four deals cleanly prices the fifth differently, and more importantly answers the phone in August when a deal needs an answer in three days. Deals get won on certainty of closing more often than on price. This article is general information, not legal, tax or financial advice. Rules change and every deal is different — check your own case with a licensed professional. Alberto Zaltzberg — Adonait · adonait.com