Whether a first-time or experienced investor, we will work with you to get your deal funded. There are many loan options on the market. We focus on helping our clients get funding for commercial real estate and residential non-owner occupied investment properties.
Our lenders are direct portfolio lenders that give us and our clients great pricing, excellent service, and make the process as smooth as possible for all parties involved. We will choose a lender/funding source based on the individual needs of the deal you are financing and have multiple sources for funding deals nationwide.
We fund properties in most states throughout the United States.
We fund investment single family homes, condos, and 2-4 unit residential (non-owner occupied only) properties.
We fund commercial properties - multi-family, mixed use, office, retail, warehouse, light industrial, self storage, automotive service (no gas stations).
As a general rule, we do not fund special purpose, raw land, construction, or rural properties.
We do asset-based lending (based on the income of the subject property), and your loan amount will be largely determined by the value of the subject property and maximum LTV allowed by the lender. While we can do loans of any size, most lenders will not fund less than 100K. We will place your loan with a funding source most closely aligned with your desired loan size, as is available with current market conditions.
With most of our lenders, a personal guarantee is required. You may however, title in the name of an entity. Ownership percentage in the LLC will determine who needs to be on the loan. This varies by lender.
Here are common documents you can anticipate providing in conjunction with your new loan, at each stage of the process:
This starts the loan process with us. We will have a telephone conference with you to discuss your new loan, prior to submitting your file to a lender. Once we determine if your deal fits our lending services, we will have you email supporting documentation. You should plan on sending us the following:
Our Deal Summary Form, completed. This tells us the perimeters of the transaction necessary for selecting the right funding source.
Current complete tri-merge Credit Report with scores. This needs to be dated within the past 30 days or less, and include all pages of the report. If you have a credit report from another lender, we can use that. An actual mortgage report is always preferred. If you do not have one, you can obtain a consumer version of your credit report for free at www.creditkarma.com or www.creditchecktotal.com. Keep in mind consumer scores may differ from scores pulled by a lender. We do not pull your credit. We will work with the report you provide us, and at some point, the lender will pull it when we get funding for your deal.
Signed and executed Purchase Contract (if a purchase loan), with all addendums and proof of escrow deposit. It is not recommended to begin the funding process until you have a signed contract.
Copy of valid Driver’s License (all guarantors).
Current Rent Roll (commercial properties only) for subject property - see form on our website if needed. Be sure to include all units, occupied and vacant. Include monthly rent, if it includes utilities, start and end dates of each lease, etc). Make sure the rent roll you provide is accurate, and matches all tenant leases for the subject property. If this is not accurate, it could kill your loan (especially when the appraiser gets out there)!
All Tenant Leases for subject property - must not be expired.
Operating Statement for the subject property - itemizing income (rents) and expenses (taxes, insurance, maintenance costs, vacancy rate, management fees, etc. You will need the past two years (2020, 2019), plus YTD (2021). Ultimately, for most commercial loans, your bottom line DSCR will get you approved or denied. Make sure this is accurate.
If applicable - Profit & Loss for the operating business (if this will be an owner occupied commercial loan which you are using for your business). You will need the past two years (2020, 2019), plus YTD (2021). Include income and expenses for the business only (not property expenses). Start ups or new businesses are generally not allowed by most lenders. They like to see history and success in business, with rising (not declining) income year to year.
Entity Documents (if titling in an entity like an LLC) you will need to provide the following:
- Articles of Organization/Certificate of Formation (name of document depends on state)
- Certificate of Good Standing/Existence
- Signed Operating Agreement with member list and percentages of ownership (very important)
- IRS EIN letter (verifying tax ID number)
- Other documents may be needed, as determined by legal department
It's important to note that documentation must support who is currently on title if this is a refinance transaction. Most lenders allow you to form a new LLC for a purchase.
Tax Returns - if applicable. Not all loans we do require tax returns. There are lenders who require them and others who do not. Please indicate your preference when speaking with us in your initial conversation if you wish to do a loan that involves tax returns (also known as a "full doc" loan). If doing a full doc loan, be prepared to provide the most recent two years of business AND personal tax returns. So 2020 and 2019. Each lender underwrites tax returns a bit differently. Most look to see that you have filed them, that investment property income is reported and in line with what is shown on the rent roll, and all the numbers should match against your operating statements and P & L's. If the numbers are not consistent across the board, or if your income is declining from one year to the next, you may want to go with a no tax return loan. Make it easier!
The specific Loan Application required by the lender. Each lender has it's own form they prefer to use. We will have you complete this once a lender (or lenders) has/have been selected.
A note about Appraisals - if you have one done recently (within the past 90 days), you can send it over for our review, for data purposes only. Most lenders will not allow the use of an existing appraisal, but there are some exceptions to this, on a case-by-case basis. You should always expect to pay for a new appraisal. Appraisals are lender specific and are generally not given to the borrower unless the loan is declined or after it closes and funds. The cost of the appraisal will be determined by the subject property type and going market rates in that geographic location in the country. The lender always chooses the appraiser. You have no involvement in this process other than paying for it (upfront) and meeting the appraiser at the property for the on site inspection (when it gets to that point).
Additional documents as required by the lender may be needed. But the above covers the basics, until we get to title and insurance.
Once we submit your loan package to the lender who has the best chance of funding it for you, we will get you a Term Sheet/Conditional Loan Approval (different lenders call it different names) to sign if they agree to move forward in funding your property. This will spell out the terms of the loan, points/fees the lender is charging, how to proceed with paying for the appraisal, and other summary details.
At this time, you will also receive our Broker Fee Agreement to sign. This tells you how much we will charge you in origination and fees to complete your loan. We get paid when your loan closes and funds. In most cases, the lender pays us directly out of settlement funds. The only fee we ever charge up front may be an administrative/processing fee, depending on the loan and how long it will take to get it closed and funded. This varies with the type of loan and circumstances/difficulty in funding. We always value our existing clients, and give incentives for repeat business with us!
Your new loan will get submitted to the lender (with documents you have provided to us), an appraiser assigned to complete the appraisal, and we will collect any additional documents from you necessary to complete underwriting. Our goal is to have all loan conditions (called “stips”) in before the appraisal/valuation gets completed on the property. This ensures that your loan will close as quickly as possible. Delays in documentation are the single greatest cause for loan closing delays! We work fast and efficiently for you, but we depend on you to get us the correct documents. We are happy to work directly with you (or an assistant you designate) so all documents can be obtained in a timely manner.
Once your loan package has been submitted, two important parts of the process underwriting will need:
Title/Escrow - You can select the title company of your choice (preferred), we can assist with selection, or in some cases, the lender can make a recommendation as well. We highly recommend only working with title/escrow with an excellent reputation for fast and professional service - or your loan closing could be delayed.
Title documents needed by most lenders include:
- Title Commitment
- Closing Protection Letter (CPL)
- Tax Certification
- Preliminary settlement statement
You can count on us to work with the closing/escrow agent and/or attorney to make sure the lender receives the appropriate documents for your loan. This is part of the service we offer as your broker (not all brokers do this). The lender will provide the necessary loss payee information which is needed for title/escrow. Keep in mind requirements also vary by state where the subject property is located.
Property Insurance - This is where you will need to authorize with your insurance agent changes to your policy, or implementation of a new policy. Lenders are very specific about what is required for coverage on property/hazard insurance policies. We will work with you and your agent to comply with the lender's requests for insurance. Most require the policy to be equal or greater to the new loan amount for the subject property, and be on an official ACORD Certificate of Liability insurance form.
In final underwriting, all documents submitted will be reviewed, and any further clarification needed may require additional documents. Once received, the appraisal will also be reviewed by an analyst for a final determination of value. Once both of those are complete, and a “clear to close” is issued, docs will be prepared by the lender and sent to the title/escrow company (selected at the start of the process) for signing. Once signed, your new loan will get recorded, funds will get dispersed, and it’s a done deal!
How quickly your loan closes is determined by how efficient you are in getting necessary documents to us, and also the time it takes to complete the appraisal on the subject property. Each lender is on a different closing time schedule, depending on the type of funding (bank, portfolio, hard money, etc).
Since the nationwide Covid pause, lenders have been trying to improve their efficiency in closing times. At present, they are still a bit longer than normal, but as time goes on and we get past the bulk of the crisis, we should see closing times shorten up on most deals.
A good estimate is about 2 weeks for a residential non-owner occupied property appraisal, and about 3-4 weeks for a commercial property appraisal - give or take, depending on the lender and volume of deals they are working on. Allowing time before and after the appraisal for due diligence and review. Lenders don't work on weekends and they don't work on holidays. So it's business days we have to make the most of! Of course, hard money deals can close much faster! These we are speaking of are for more traditional turn times on investment properties.
If you are under a balloon payoff or other deadline, please let us know at the start of the loan process so we can accommodate you when possible. For purchase contracts, it is recommended you pad in extra time than was needed pre-Covid. No lender wants to start a file with a rush expiration date they cannot accommodate. You may need an extension. There are many people that have to do their jobs to get your loan to closing. Think of it like a symphony. Everyone has to work together.
Our residential investment and commercial property mortgage programs are designed for investors who want a simpler (and often faster) loan process than traditional bank loans. Both purchase and refinance loans are available.
Please note, we do not finance residential 1-4’s where the borrower lives in the property. They must be rental properties. Commercial properties may be owner-user.
We do not finance raw land, construction, rural, or special purchase properties. If you are unsure, just call us and ask.
We look forward to working with you on your next investment property loan and appreciate you referring us to your family, friends, and investor colleagues.
If you have an investment group you are a part of, we are always open to offering a presentation on investment property financing that is tailored to your member base. Just call us.