1. Understand your financing needs. Before starting a dialogue with a lender or financial intermediary, understand the type of loan you’re seeking. Is it bridge, construction, permanent, or rehab/expansion?
2. Understand your lender or investor’s needs. Remember that lenders are motivated to get your loan, but only if your needs are realistic. It's up to you to qualify for a good loan. The more you know and understand and are able to articulate, the better impression you will make with the lender.
3. Understand your property. You are the expert where your property is concerned. Any question a lender has is fair game, so make sure you're prepared to answer them. If you don’t come across as knowledgeable about your property, the lender will not be confident that you will be a profitable operator.
4. Research intermediaries. Make sure you choose a qualified intermediary to represent you. Many borrowers don't feel comfortable dealing directly with lenders. Instead, they'll choose to have a consultant or financial intermediary (broker) represent them. Often those who select a qualified intermediary have a higher success rate for funding because the intermediary is in the business of making deals work smoother and more quickly. This will ensure a better chance for success.
5. Have realistic timing goals. Realize that even a fast‑moving financing transaction will take time. To make sure that your loan is on the fact track, assemble all materials for a loan package in advance so they are ready to present upon request.
6. Have accurate data. The fastest way to disqualify yourself for a loan is to provide inaccurate data to your lender. Review all financial statements and property information and assemble all data in advance. Make sure you have reviewed in detail all current debt. If you will be paying off the debt, make sure that debt is open to prepayment.
7. Process lender/investor requirements quickly. More than half the responsibility for a prompt loan closing lies with the borrower. When a lender requests updated numbers or additional data, it should be delivered promptly. Have three years’ historical data up to speed and copied, and ready to present. Also, have enough area data put together so that your lender can be sufficiently knowledgeable about the context of your loan.
8. Be open-minded. Borrowers who think they have all the answers wind up turning off most lenders. Remember, while you're the expert on your property, they're the experts on financing it. It's always a good idea to respect your lender’s expertise; if you can’t, find another. This doesn't mean you can't ask questions. Questions are usually accepted and even encouraged by lenders.
9. Remember that talk doesn’t make deals. However, a quality presentation with excellent material does. Successful applications are all about quality paperwork.
10. Court long‑term relationships. The first loan you make with a lender can be the beginning of an important long‑term relationship. Be prepared to listen and learn about how the lender works and what information they are looking for.