Expert Investors

Quick Closing Commercial Lending

How Commercial Mortgage Bankers Can Find Quick Closing Loans

Commercial real estate mortgage bankers provide a valuable service. They work with a variety of lenders to ensure their clients get the best loan terms possible. As lender risk appetite ebbs and flows, maintaining a current and accurate lender list is an important element of delivering value as a mortgage banker.

A critical element of that is the “Quick and Confident Closing” section of the list. In certain deals and certain situations, time is of the essence, and mortgage bankers need to close a deal fast in order to realize the profit the deal promises. In these situations, time to close and certainty of close become vital metrics of success, even if they don’t appear on the deal sheet.

It’s imperative for mortgage bankers to be able to recognize when they’re in a situation when a quick close is required, and to know exactly which lenders they can count on to deliver a signed and sealed deal in a time-sensitive situation.

Lima One Capital is one of those lenders. In the last few weeks, we’ve helped multiple commercial lenders navigate quick closes in Florida, Texas, Ohio and more.

Based on our experience, here are the three big reasons that quick closes are required, along with some tips on how to respond if you find your deal in a time-sensitive situation.

Agency Fallout

Nothing is more frustrating for real estate investors than having a deal on the table, only to receive the dreaded email when an agency cuts proceeds or pulls approval late in the due diligence period. These unexpected occurrences wreck a deal unless you know how to recover. And you need to recover fast, because your close date doesn’t necessarily move just because an agency fell out in the middle of the process.

The same can be said for lender retrade scenarios in which a borrower might want or need to find a new lender after terms change or a lower than expected appraisal arises.

In these situations, a mortgage banker needs to know who to call, and make the call quickly. Having a trusted resource for a quick close turnaround is an invaluable resource to keep borrowers happy and deals on track.

Time-Sensitive Opportunity

Sometimes a deal is on the fast track not because of a previous problem but because of necessity. The seller insists on a quick closing, or a deal needs to be closed by the end a month or a quarter. In these cases, commercial mortgage bankers need to have a list of quick-closing lenders on hand so that they don’t waste time getting quotes from companies that could never meet the timeline.

Knowing what specialty lenders can close quickly gives mortgage bankers the running start they need to get the deal done. Finding a lender like Lima One Capital with a proven record of 30-day closes, even on multimillion-dollar deals, gives bankers a great selling point with borrowers who want to take advantage of every good opportunity, no matter the time to close.

One tip here: A lender with proven underwriting efficiency becomes a commercial mortgage banker’s best friend in time crunches. A lender’s ability to assess the situation quickly, ask for the right documentation the first time, and analyze it quickly can be the difference between a 21-day close and a 60-day close.

This process includes a large network of appraisers and inspectors who will answer the call and work quickly when necessary. When timing is of the essence, having a thorough network of service providers you can trust to provide a quick turnaround is essential. A nationwide lender like Lima One Capital can leverage this kind of network to facilitate a quick close.

Auction Closing

Auctions provide a specific type of opportunities for real estate investors. Investors can find better margins at auction, but they also need to have cash in hand quickly to close the sale once the gavel drops.

Having a lender who can provide cash for an auction closing, or who can do a quick cash-out refinance so that investors can continue to leverage their portfolios, is a key to auction investing success. The mortgage banker needs to have a lending resource at hand that can offer this service so that investors can pounce when the right property hits the auction block.

Takeaway

A deal that requires a quick close may not be the norm for commercial mortgage bankers, but it can be the difference between a win and a loss on the ledger sheet. That means that commercial mortgage bankers must be prepared with a list of specialty lenders that can structure a deal and underwrite it quickly, even if the pieces are moving.