by Ian Hardcastle, Relationship Manager
How fast can you close? As relationship managers, this is one of the most frequently asked questions that our borrowers ask – and we understand why. Timing is everything in real estate investing, and the speed in which a borrower can access capital is a significant factor in the overall timing of the project. At Corevest, we believe that the borrower/lender relationship should always be efficient and fruitful. We have fine-tuned our underwriting process to help borrowers achieve rapid closing timelines. Here’s how to close a portfolio loan in 30 days or less – through greater organization, communication and execution between borrower and lender.
When you are off to the races, getting your ducks in a row prior to the due diligence process can make all the difference. There a few key organizational steps you can take in the early stages of your refi or acquisition that will set your loan on the path to a 30-day close. The first step is to make sure that you will be operating at 90% occupancy at time of close. If you are below 90% occupancy prior to kick off, make sure you have an effective plan in place that will ensure you get to proper occupancy levels. It is recommended that you have a tenant lined up to get you there prior to kick off, with the execution of the lease happening no later than a week into diligence.
It is also important to consolidate all property level documents that will be required to close. CoreVest will send you a welcome email at the early stages of the process that will systematically outline all property related docs required to confirm the metrics of your portfolio. Be sure to consolidate all leases, purchase contracts, deeds and property specific documents that will verify the information submitted in your initial data tape.
While gathering docs on a portfolio-wide basis may seem cumbersome, organizing all your property-specific documentation into a consolidated folder will only help to improve the organization of your business. Having a clean consolidated folder will also help CoreVest review the documents earlier on in the process and clear up any exceptions or discrepancies.
Communicating frequently and effectively is perhaps the most important part of ensuring a speedy close. Closing a loan in 30 days will require effective communication between your lender, your tenants and other third parties, such as appraisers. The appraisal process can often be the lengthiest step in the underwriting process. Post kick off, CoreVest will provide your contact information to the asset management company who will be ordering appraisals. We instruct all appraisers to reach out immediately to schedule property visits. It is imperative that you answer the appraiser’s requests to visit promptly and keep the chain of communication open during the process.
Tenants can often prohibit quick access and turnaround time. However, if you begin reaching out to your tenants in parallel with signing up for a loan, this can help keep the ball moving. If tenants cannot be reached via phone or email, we have found that a friendly note left on their door outlining a time and date for the visit can be an effective and non-intrusive way of ensuring that the visit will be scheduled.
It is also important that you communicate with us, your lender, on a routine basis. As part of the process, a CoreVest loan coordinator will send weekly updates outlining what is required to close. All members of the CoreVest team are also readily available to assist should you run into any unforeseen roadblocks or have questions about the process. We recommend that you reach out to us directly and immediately instead of letting potential issues grow. As your partner, we like to think of ourselves as professional problem solvers. It is our job to make your life a bit easier and help you reach a speedy solution.
So, you are extremely organized and very effective at communication. What’s left to do? The answer is execution. Speed and efficiency is best achieved by using the tools of organization and communication to breed action. It is important to apply a regimented schedule and see it through. Dedicate blocks of time early on in the process for uploading docs into our online portal, for responding to appraisers and third party vendors, and for taking care of any legal aspects of the underwriting process. It is safe to assume that the execution within the first two weeks after the kick off call will determine the outcome of the final two weeks. For example, if appraisals are scheduled immediately, we can get values back in a matter of days. If property docs are uploaded right away, we can begin our third party review earlier on. And, if your entity formation is taken care of at the onset, legal docs can begin to be formed and required accounts can be established contemporaneously.
The CoreVest team has an internal process in place that is meant to simplify and expedite the closing process. However, reaching the closing table takes committed effort from all sides. Proper organization, communication and execution, will ensure a close in thirty days or less – and we are here every step of the way to help you get there.
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 Ian Hardcastle at 310.340.7078 or submit our contact form.