Frustrated with lender - I lost my deal

[MKBridge]

Ok, I am not having luck with purchasing real estate! My first three have attempts have fallen through the cracks. This last one makes me so frustrated. Great townhouse complex, good location, completely remodeled unit from top to bottom, excellent below market price as the sellers were very motivated! Cash flow of about $320 and my pick of renters.
Tentative lender gave me an offer Monday morning for a mortgage. I gave them every piece of documentation they required - on the town house, on my credit situation (not a problem there). Subjects were to be removed today. The lender comes back this afternoon and sayed they don`t like some things that are in the past strata minutes, or the look of the complex (they had someone take pictures and research rents). Would not give me a mortgage. Today - the day the subjects were to be removed! Not 2 days ago, not yesterday. They had the documents for several days.
Another offer for the townhouse is in the wings so I am sure the seller will take it, I can`t see it being cheaper than mine. Hopefully the buyer will purchase the home inspection from me that I did on Tuesday for close to 400 bucks. I`ll give them a good deal!
What can I do to avoid this situation in the future?
Thanks Kathi

 

[trev]

QUOTE (MKBridge @ Jul 16 2009, 11:30 PM) Ok, I am not having luck with purchasing real estate! My first three have attempts have fallen through the cracks. This last one makes me so frustrated. Great townhouse complex, good location, completely remodeled unit from top to bottom, excellent below market price as the sellers were very motivated! Cash flow of about $320 and my pick of renters.
Tentative lender gave me an offer Monday morning for a mortgage. I gave them every piece of documentation they required - on the town house, on my credit situation (not a problem there). Subjects were to be removed today. The lender comes back this afternoon and sayed they don`t like some things that are in the past strata minutes, or the look of the complex (they had someone take pictures and research rents). Would not give me a mortgage. Today - the day the subjects were to be removed! Not 2 days ago, not yesterday. They had the documents for several days.
Another offer for the townhouse is in the wings so I am sure the seller will take it, I can`t see it being cheaper than mine. Hopefully the buyer will purchase the home inspection from me that I did on Tuesday for close to 400 bucks. I`ll give them a good deal!
What can I do to avoid this situation in the future?
Thanks Kathi



I had a 4 plex and a 5 plex, great income, credit, cashflow but couldn`t seem to get that 3rd place.
Changed strategy, mortgage broker and my presentation and BANG..... bought 10 places in 13 months.

Now I seem to have hit another wall, so back to the drawing board for me too.

That`s OK, I`ll figure it out.

Keep trying, you will too.

Every "no" brings you that much closer to a "yes"

 

[Anonymous]

Hi Kathi...my fellow Vernon investor,

Sorry to hear the bad news of your deal falling through. In my experience, the problem always tends to be with financing. I can`t tell you what to do, only tell you what I do that works for me time and time again. I work with one lender (for now) and she thoroughly knows my financial situation. This helps when she has to go to battle for me. If I sense a "no" coming my way, I threaten to go elsewhere. Remember, banks want your money. It really is a game and the rules seem to be flexible to some degree. Banks have an "exception department" for a reason. Go in with confidence no matter what, but have a second and possibly third lender lined up. I always give myself 3 weeks for subject removal. I never want to be in your situation and believe me, it`s been close. I`ve had to ask for extensions for this reason. I would be really upset with a lender if they had declined me on the last day without giving me a chance to go elsewhere or extend the subject removal deadline.

Perhaps next time, wait until you have a written approval for financing from the bank before going ahead with an inspection. It shouldn`t take weeks for an approval - if it does, there`s a problem.

Good luck next time!
Lee

 

[eddyb1978]

Hi Trev,
Do you care to share your mortgage broker contact? i can definitely use him!

Cheers,
Eddy

 

[Thomas Beyer]

QUOTE (MKBridge @ Jul 16 2009, 09:30 PM) ...
What can I do to avoid this situation in the future?
..
some suggestions

a) work with a mortgage broker .. not with a lender directly .. as a broker can send it to multiple lenders and you get better service and lower rates usually !
b) give yourself a few weeks to get a mortgage .. 2-3 MINIMUM .. as banks these days are taking longer and review documents more thoroughly

Was this a mortgage for less than 80% of price ? or more ? if over 80% allow 4 weeks as even more underwriting is involved !!

What specifically did they not like about the condo dox ? perhaps they have a point you can learn from ?

 

[RobMacdonald]

Hi Kathi,

It`s difficult to get a pre-approval for financing on a rental property as so much hinges on the actual property and cashflow. However, you can got through a consultation process where a broker experienced with rental property financing can narrow down your lender options for you. Working with a bank directly can limit your options. They may have a particular underwriting policy that other lenders may not, not to mention an acceptable level of service.

In the future, you should try to get 10 to 14 days to remove the financing and inspection condition. The financing should take no more than 3 to 5 days, leaving you lots of time for the inspection.

If you`d like to discuss your options, feel free to give me a call.