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As such, relationships with the lender are key. Develop a reputation with private lenders that will place you at the top of their list. Tight, complete loan packages trump persistence and persuasion.
Get to know your lenders before you actually have a live deal. Seek those that lend to a niche similar to your own. Be aware of their preferences in terms of location and deal size.
For example, contacting a Bay Area lender about a $10 million loan on an apartment building in Denver could be a wasted effort -- especially if the lender prefers retail centers in California.
Pay attention to the market
Lenders' appetites for deals change depending on funds and on the changing sentiments of investors. These can be impacted by everything from market conditions to competition from the stock market. Things can turn on a dime.
Private lenders' primary focus is their portfolio and their investors -- not individual loan opportunities. If there is a hint of a market correction or a shift in rates, or if there are changes in the economy that could impact them, underwriting will change.
Therefore, a loan opportunity that is identical to one you just concluded may hold no interest to the same lender just a few days later. This has nothing to do with you or with your borrowers. The lender most likely is rebalancing its portfolio. Or it is matching its funding dollars with another, larger loan that it has been working on for months.
Never forget that you and the private lender have the same goal: to complete this loan and to move on to the next one.
Knowledge, skill and patience allow you to complete the loan. And when you do reach the end and close a lot that others could not, you could gain a sense of satisfaction that you didn't think possible.
Richard Zahm is
a principal of Second Angel Bancorp, a California-based mortgage bank and direct lender, providing residential and commercial funding. Reach him at (916) 863-7300 or rz@SecondAngel.net, or visit the company's Web site, www.SecondAngel.net.
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