Why Lenders Need to Have a Meticulous Process

In this article learn what makes a trustworthy lender and understand why due diligence is a crucial part of a lender’s job.

In order to be a successful, respected, and trustworthy lender it is important to be meticulous in your process. While time consuming, due diligence is a crucial part of a lender’s job.

Each step of the lending process requires attention to detail, but there are three main areas that lenders must examine very closely in order to have the most successful outcome for all parties involved.

  1. Familiarize yourself with the property. Take the time to research the financial and physical characteristics of the property. Before beginning the underwriting process, you’ll want to have a deep understanding of the current conditions, if renovations are necessary, the location, and the size. You will also want to look at the profitability by examining the property’s current and forecasted income and rent roll. Lastly, compare similar properties to ensure that the requested loan amount is reasonable.

  2. Get to know the borrower. There is a substantial amount of information required from the borrower in order to be approved for a loan. You’ll want to gather all of the information provided and assess the risk that they carry. Inspecting several documents is a tedious task, however, by doing so you will be saving yourself the headache later on. It is well worth your time to guarantee that the borrower is able to make payments on the loan.

  3. Pay attention to what works and what doesn't. Once you have some experience under your belt and have done your due diligence it will be easier for you to determine what deals will close and which ones won’t. Although each deal is going to vary to some extent, you will also find things in common. Examine details closely and use your knowledge from previous deals to make innovative suggestions as you negotiate loan terms.

Having a meticulous process allows all parties to enter into a deal with confidence. Taking shortcuts often leads to more issues down the road, so it is better to take your time on the front end.

Experienced lenders specialize in delivering prompt and time-effective service. They have repeated due diligence processes numerous times and know exactly what to look for. As an investor, do your research and find a lender that understands the landscape of your particular investment. Just because the process is tedious does not mean it has to be painful for those involved!

Reach out to the experts at CALCAP Lending to find the right loan program for you!

Palm trees in LA against a pink/blue sky.

About CALCAP Lending

A division of CALCAP Advisors, CALCAP Lending benefits from the expertise of a seasoned team of professionals with extensive, successful track-records covering a variety of disciplines and leading large, nationally-recognized institutions. A private money direct lender, CALCAP Lending provides short to mid-term financing for property investors and businesses looking to purchase, refinance, renovate, and construct residential or commercial properties.

Lending FAQs

You've got questions, we've got answers.

What is private money lending?

Private money lending is a collateral-based lending strategy that is often associated with shorter terms and more attractive features. A private money loan offers more flexibility than a conventional mortgage or bank loan.

How does a private money loan work?

Private money lenders provide financing using money from private entities. Private money loans often work as bridges to help investors gather funds to achieve their short term real estate goals, but long term, permanent options may also provide.

Why would I choose a private money lender?

There are many advantages to using a private money lender for your real estate investments! Private money lenders can be more lenient when it comes to borrower credit issues, often there are no prepayment penalties, you can leverage your cash to buy multiple properties, and private money loans are quicker when compared with institutional loans.

Can I get prequalified for a loan?

CALCAP has a responsive loan team who are able to prequalify you. Contact a loan specialist at 833.816.5580 to get started.

How long does the lending process take?

Private money lending can be a quick and painless process. From start to finish, 30 days is common, however, turn around times can be as short as 10 business days.

Can I still be approved for a loan if I have bad credit?

Generally yes, we understand that people have temporary financial issues that come up, and we want to work with you to help you rise up financially to a better place. Offsets to credit concerns may include experience as a real estate investor, good cash reserves, and/or larger down payments.

I am a broker or investor, how can I work with CALCAP?

Business is built on relationships. Ours is no different. CALCAP Value and Preferred Partners receive exclusive rates and services. For more details and to submit your application, visit our partners page.

The side of a tall apartment building lit by the sun.