Every day in America, the term “private lenders” or “commercial lenders” is searched over 10,000 times on search engines by real estate investors. There’s over 100 legitimate companies willing to lend on rental properties, but which one is right for your situation? That’s where brokers come into play. Brokers are typically connected to several private lending companies. Because of this, brokers are often able to offer the best option for your scenario. Lenders require certain credit scores, property values, seasoning periods and many other factors that can alter approval. Investors don’t often have the time or patience to contact all the companies to discover their best options.
Another beneficial factor is having an “insider” on your side. Brokers often have good relationships with the lenders and the account executives. After all, brokers usually result in 50% of all business for private lenders, and when you’re bringing consecutive business, the AE’s and lenders offer more attention to your deals. There’s also the “middle man grounds” when dealing with a broker. What this means is a broker is going to get paid regardless of which lender you go with. So a broker is less likely to just tell you want you want to hear just to get you under contract. If you don’t like what one lender is offering, a seasoned broker will often have several other options. When you work with a lending company directly, it’s very common for them to have a “play on words” or tell you only what you want to hear.
Hours and convenience is another reason. I, for example, work 7 days per week on my deals. When doing financing without a broker involved, any questions you have will only be answered during business hours. I respond to my clients on weekends, early mornings and late nights. Because of this, deals often close sooner, since responses on questions aren’t delayed.