Need a lender with a little more flexibility and can get deals done? Let’s face it. Real estate investing can be hard, especially the financing. If your deal does not fit into the perfect little box for easy financing, you may want to consider a portfolio lender.
A portfolio lender is a lender that loans it’s own money and keeps the loan in its own portfolio. These are most often local banks and credit unions. As a real estate investor, it is a great idea to have a solid relationship with a portfolio lender because they are able to close deals that traditional lending sources cannot. They underwrite their own loans so they have their own guidelines and can often bend in one area to get a deal closed. The biggest advantage to a portfolio lender is they do not abide by the typical conventional guidelines.
Below are several reasons you would want to use a portfolio lender:
Here is what to expect with a portfolio lender:
We have relationships with many portfolio lenders. We would love the chance to discuss your scenario so we can get you to the right lender for your project. Give us a call today and let’s see if we can help you get your deal done!
Your first step is to call our office so we can discuss your goals and your scenario. From there we will do our best to refer you to the best portfolio lender for your situation.
Each portfolio lender will have a different process but you can count on it taking a while. They will typically start with a conversation and then ask that you send in your financial statement and details on your deal. They will typically underwrite what you send within a day or two and will then have more documents they will want to collect. The initial approval process will take between one and two weeks in total.
Following the initial approval, you will be sent a term sheet which details what the lender is willing to do. This will include the loan amount, interest rate, payment terms, collateral required, if you will need to deposit with their institution, and any other major items that you would need to know. If you receive a term sheet, the chances are very high you will get the loan if you agree with the terms being offered.
At some point, the loan would need to be formally approved by a loan committee. This committee contains senior-level personnel for the portfolio lenders. They typically meet to talk about deals one time per week which can really slow you down. If you miss a week you may need to wait an entire week to get your formal approval. Many times this happens before the term sheet but some lenders will only present deals to the committee if they have a signed term sheet.
Appraisals and title work are all started after the term sheet and you will close when all the documents have been returned. This can be a slow process as it will take 2-4 days for the lender to select an appraiser and for you to hear from them to set up a time to meet.
Pine Financial Group is your real estate investment financing expert and can walk through options with you. With a clear understanding of your deal, we can help guide you to the right solution. If there is a solution, we will find it!
Aspire Properties, LLC
Keller Williams Realty
Owner of Axis Title
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