Tag Archive for: real estate lenders

When you’re filling your money bucket, being honest with lenders can make a huge difference in your loan and the options they offer!

1. Be Honest About Your Financial History

This may seem obvious, but make sure you’re honest with your lender.

Make sure you’re upfront and honest about your financial history with your lender. It should go without saying, but don’t try to hide a bankruptcy or that you defaulted on a loan before. 

If you’re concerned about your financial history, trust us: It’s much worse to hide it and make the lender find out on their own (which they will).

Once they find out, it will be harder for you to get a loan. And if you do find a loan, your options are going to be severely limited—not just because of the history, but even more so because you hid important information. 

Options are super important to your work as a real estate investor. 

Options drive down the costs of loans. Anytime you pay less for money, the more money there’s going to be in your bucket. 

2. Stick to Your Timeline to Build Trust with Your Lenders

Similarly, when you say you’re going to get a project done, get it done. Whether it’s a flip or a BRRRR, construct a solid timeline on the front end. This keeps you and your lender are on the same page.

It’s often a good idea to put in a bit of a cushion when talking to your lenders so that you don’t panic if there are minor delays in your project. 

Lenders want to see honest people who are doing their best. Most lenders are happy to support investors who are upfront with them with more money, more funding, more options. 

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Ordinary people’s money is fast, cheap, easy funding, but why would OPM lenders WANT to give you money?

OPM is usually known as “Other People’s Money,” but with our real estate clients, we think of it as “Ordinary People’s Money.”

Relatives, friends, and people in real estate groups would all be open to lending you money for your investments.

This type of private money is fast and less expensive, with minimal paperwork. But why would these people WANT to give you their money?

Why People Want to be OPM Lenders

Part of why OPM in real estate works so well is because it’s a win-win.

Your lender gets a better return on their money than many other investment methods, for zero work.

You’re paying them a (lower than institutional funding) rate of interest. Especially with the economy as unpredictable as it is right now, people who have cash want a stable place to put it with a consistent return. Becoming an OPM real estate lender offers just that.

In addition to a stable rate, OPM lenders also get to invest in their community. Rather than putting money in stocks, national banks, or huge funds, they get to support a small business like you.

Finding OPM for Real Estate

Reach out at Info@TheCashFlowCompany.com, and we can show you exactly how to find OPM real estate lenders.

What we can’t help you do is keep them – that part is up to you. When you find OPM lenders, make sure to take care of them, get them their returns on time, and be honest throughout the process.

A good lender will either stick with you for the long haul or disappear after the first deal, and it all depends on how easy you are to work with.

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What a DSCR Lender Looks For


Know what a DSCR lender looks for before you close!

While conventional conforming loans have one main underwriting guideline all lenders follow, every DSCR lender creates their own requirements, offers, and processes.

The most important thing to know about DSCR loans right now is that they vary from lender to lender. You need to get to know the lenders in your area.

How DSCR Loans Differ

Firstly, each lender has their own nuances. Any number of these factors can change for a DSCR loan between different lenders:

  • Ratio requirements
  • Credit score requirements
  • Terms and products (interest-only, 40-year, etc.)
  • Interest rates

Lenders will also have different restrictions for properties, based on:

  • Location
  • Unit size
  • Short-term vs traditional rentals
  • Personal name vs LLC name

To be successful with DSCR loans, then you need to become a master of which lenders offer what in your area.

Lenders won’t come knocking on your door to let you know what products they have available. You have to be proactive.

How to Connect with DSCR Lenders

With more investors asking for money and less money available, many lenders are overwhelmed. The best thing you can do is be proactive, educated, and prepared with your lenders.

It’s also wise to get someone who can help connect you with lenders and products. A place like The Cash Flow Company can help with this aspect of real estate funding. They can advocate for you to make sure you get the best loan for your deal.

What Ratio Requirements A DSCR Lender Looks For

“DSCR” stands for “debt service coverage ratio.” It’s a number that explains cash flow, or money coming in vs money going out.

In a real estate rental situation, there are two important numbers to figure out this ratio:

  1. Income – rent from tenants.
  2. Expenses – mortgage principal and interest, taxes, insurance, and any HOA fees.

The ratio is income divided by expenses. Therefore, if your income 100% covers your expenses with none left over, that’s a ratio of 1:1. Most DSCR lenders require 1:1 as a standard minimum.

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