Published on June 26th, 2022

The most productive and sustainable relationships are premised on a strong foundation of mutual trust. You trust your attorney to provide objective, well-researched legal insight. You turn to your physician for dependable, effective medical treatment.

What about your private money lender? For many Americans, one of the most significant financial life events is purchasing real estate. For investors, a lender is the primary means of scaling their business to generate favorable returns. It is essential to have a dependable lender in your corner—one you can depend on for efficient and flexible funding options with competitive terms.

Finding the right lender for your real estate transaction entails more than just locking in the best interest rate. Just as important is ensuring you are comfortable working with the organization sourcing the capital you need. Choosing a lender is like choosing a business partner. At the end of the day, you are both invested in each other’s long-term success. A profitable investment property facilitated via a properly structured financing protocol is a win-win situation for both you and the lender.

To help you find a lender you can trust, the financial experts at Gauntlet Funding have compiled some practical tips real estate professionals can implement when choosing a lending partner. It’s a crowded market for sure—there are plenty of lenders competing for attention. Although the options may seem overwhelming, the following advice will help you confidently vet potential lenders and find the best fit for your given situation.

Transparency Is a Must

Ally Bank recently conducted an extensive internet survey to gain a better insight into what borrowers look for in a lender. Customer service topped the wish list, with 48% of respondents citing subpar client focus as the reason they cut ties with a lender.

Having a streamlined application and underwriting workflow was also a sticking point, along with low interest rates and minimal fees. The key to selecting the right lender is knowing what questions to ask. Are there excessive administrative and processing fees hidden in the fine print of the lending agreement? Do you know what factors the lender focuses on when evaluating a proposed deal during the underwriting process? Does the lender offer advice and insight on how to improve your application?

A good lender will be able to answer all these questions and will do so in an efficient and detailed manner. The way they interact with potential clients is indicative of the type of service you can expect in the future.

Experience Matters

Every market across the country has its own nuances and trends that can vary significantly based on myriad factors. Trusted lenders will have a track record of successfully funded deals in the local market you are considering buying into. They need to be intimately familiar with what types of investments produce optimal returns based on market-specific demographic and economic considerations and use this insight to assist you in choosing what types of properties to consider pursuing.

Reach out to local real estate agents, fellow investors, and even the internet to get a better understanding of a prospective lender’s reputation in the local community. Their input will help you make an informed decision when choosing a lender you can count on for expert insight and the know-how to help you generate sustainable cash-flow.

Flexibility Counts

Be sure you are working with a lender that has a combination of capital sources. A firm that doesn’t have to rely exclusively on a third party or external group of investors to fund their business can provide more flexibility when it comes to the type of deals they can fund, the terms they can offer, and repayment plan options. That’s because lenders with adequate in-house resources don’t have to first obtain the approval of any outside financial backers during the underwriting process.

A trusted lender will be transparent about the viability of the proposed transaction and have the means to make commonsense deals happen—even if that means working with the borrower to adjust certain aspects of the financing to accommodate their needs.

Speed Is Critical

The primary benefit of partnering with a private lender is speed. Loan applications and disbursal of funds are typically processed in a matter of days compared to the multiple weeks, or even months, it can take for conventional lenders like banks and credit unions to do so.

With inventory levels depleted across the country and the demand for new housing rising exponentially, it is becoming an increasingly competitive market for aspiring real estate investors and homebuyers. Buyers simply can’t afford any delay in financing if they are to be competitive when submitting an offer. Is your lender able to facilitate quick access to the capital you need when you need it? One of the first questions you should ask potential lending partners should be how long their underwriting process takes and what steps you can take to expedite the process. This information will enable you to bid confidently with the comfort of knowing financing won’t be an issue.

Original Article: Partnering With a Lender You Can Trust