Top 3 lending mistakes investors make

[Matt Bridgman]

Here are top 3 mistakes I see as a lender among investors - new & experienced:  Feel free to comment or give me your list. 

3. Exit strategy = You may get an awesome rate on that DSCR, but what is the prepayment look like? What happens if you need or want to refi or even sell? You may be better off with a higher rate and the flexibility to access the equity in that property to grow your business or even bail you out of a jam. Don't let your loan box you in

2. Loan Diversification = Do not stack up a bunch of one loan product for your portfolio. If you have an actual lending strategy then different loans will serve your overall portfolio goals in different ways. If I see someone with 5 properties and all 5 are DSCR it screams that the total strategy of the portfolio is not being considered

1. All transaction/no relationship = A lending partner should understand their borrower, how the got into investing and what their overall goals are. A transactional relationship is one that is for the moment that may or may not work out. A relationship is one that is supporting through the ups and downs. Relationships always build better more profitable relationships.