By Jack Jerue One of the most appealing aspects of real estate investing is the…
by Gina Lambis, Phat Chau, & Adriana Popa
How quickly can you fund? As members of the Bridge funding team, this is the #1 question we hear from our existing credit line borrowers. While there are several factors, seen and unforeseen, that make funding in a timely fashion challenging, there are several steps that can be taken to ensure the process goes smoothly, quickly and efficiently.
We remind our borrowers that time is of the essence when requesting a loan advance. When an asset has been identified and a contract for its purchase has been entered into, the funding team at Corevest should be notified immediately. The sooner we are looped into the closing, the sooner we can begin our due diligence and get a property prepared for funding. Once a borrower gets the property under contract, a copy of that signed contract should be sent to CAF along with the title company’s contact information. Whenever possible, the process can be even more quickly moved along by connecting the title agent with a member of the CAF funding team directly from the onset.
The title process often causes the biggest delay in the funding process which is why it is so important to have all parties (lender, borrower, title agent) connected as early as possible. This will ensure everyone is on the same page from the start and any potential title or closing issues can be addressed and remedied as they arise so as to not delay the funding.
Although some things may appear to be out of your hands when dealing with closing and funding, there are areas in the process where a borrower is able to assist in moving it along more quickly. Responsiveness is a key element that helps accomplish that goal, especially as it relates to valuation scheduling and signing of funding documents.
The valuation process, particularly for appraisals, often causes the second biggest delay in the funding process. It is vital that the borrower or their point of contact be responsive in scheduling an inspection once the appraiser reaches out to them for an appointment. Follow-through is also a major factor in time management. For example, it is important to be at the property on the agreed upon appointment date and time to give the appraiser access to the property.
Signing funding documents is another area where responsiveness counts. Our funding team is very diligent in creating and sending out funding documents as soon as all due diligence items (primarily clearing title and obtaining the valuation) are completed. Once loan docs are sent out, it is imperative that the borrower stay in constant contact with the seller and title company to schedule a signing with a notary. Naturally, the faster this signing is scheduled, the faster we get our signed funding docs, and the faster we fund.
Always be prepared. What does this mean from a funding perspective? It means having insurance for your properties already in place or ready to be bound at closing. It is our policy to not fund any asset without proper insurance coverage. CAF requires two types of insurance for all of its funded properties – property insurance which covers up to the full value of the property and a commercial liability policy. For those borrowers who are not familiar with our required coverage, we are here to help. Any questions we cannot answer fully, we will refer to our preferred insurance consultant who knows our product and insurance requirements. They can be available to answer any in-depth question and/or even bind coverage for you, if needed.
Your Financing Partner
So how quickly can we fund? In short, as quickly as you allow us. We, the bridge/line-of-credit team, understand that our borrowers are busy running their businesses and balancing their professional and personal lives. We recognize that our borrowers may not always be available. This is why we often remind our borrowers that any break-down in Communication, Responsiveness, or Preparedness may cause a chain reaction that ultimately leads to delays in funding. As a financing partner, we want to fund deals fast and provide all our borrowers with a quick and efficient process while maintaining top class service. We understand that time is money and continue to work tenaciously with our borrowers to ensure all closing transactions are as seamless as possible.
CoreVest is a leading provider of financing solutions to residential real estate investors. We provide attractive long-term debt products for stabilized rental portfolios as well as credit lines for new acquisitions. For more information about how CoreVest can help grow your rental and rehab business, please call 844.223.2231 or submit our contact form.