First Meeting with Lender Advice

[Tommy Barone]

I'm looking to start the investment process so the first thing I did was talk to a person that I knew that works for a lender in Rhode Island. It's a bank that many people have had great experiences with.  After running the numbers based on my financial situation, he told me I'm essentially able to afford whatever I want depending on the loan program. I guess that's good news to start and he wants to meet with me Monday to discuss loan programs.

I just paid off all of my debt so my cash on hand is growing slowly from scratch.  Looking Ultimately for home to live in strictly residence and family eventually, but in the meantime looking to house hack or find investment opportunity. 

My questions to the community are:

My real estate agent who is a close friend of mine wants to talk to him directly, is that normal? 

What should I be prepared to ask - what kind of questions besides having my safe zone numbers ready to go?

What should I tell him? 

[If get into something that's costly, will I still be able to borrow from him if something else pops up] , that kind of thing? 

What questions are geared towards someone wanting to get into multi family and investing, owner occupied financing options, low down payment options, OPM, etc.

Are there are deal sweeteners that I can offer? 

[Chris Mason]

Originally posted by @Tommy Barone:

I'm looking to start the investment process so the first thing I did was talk to a person that I knew that works for a lender in Rhode Island. It's a bank that many people have had great experiences with.  After running the numbers based on my financial situation, he told me I'm essentially able to afford whatever I want depending on the loan program. I guess that's good news to start and he wants to meet with me Monday to discuss loan programs.

I just paid off all of my debt so my cash on hand is growing slowly from scratch.  Looking Ultimately for home to live in strictly residence and family eventually, but in the meantime looking to house hack or find investment opportunity. 

My questions to the community are:

(1) My real estate agent who is a close friend of mine wants to talk to him directly, is that normal? 

(2) What should I be prepared to ask - what kind of questions besides having my safe zone numbers ready to go?

(3) What should I tell him? 

(4) [If get into something that's costly, will I still be able to borrow from him if something else pops up] , that kind of thing? 

(5) What questions are geared towards someone wanting to get into multi family and investing, owner occupied financing options, low down payment options, OPM, etc.

(6) Are there are deal sweeteners that I can offer? 

(1) Good real estate agents will want to vet the lender for competence - remember, it's the lender that is presenting your case to the gatekeeper (mortgage underwriter) who controls access to 70% to 97% of the purchase funds. Further, when you write an offer the listing agent might just pick up the phone and call your lender directly (for that same reason), so it's good for you if your agent has an idea that he's not going to blow that conversation... or the transaction itself.

(2) Experience with REI. Most lenders are not REI friendly. None of our official licensing education/training/testing covers investment properties, it's on us to learn (or not) that extra stuff on our own. For example, I don't know squat about reverse mortgages because my extra "out of school" studying/learning is all about investment property stuff.

(3) The more the lender knows about your situation and goals, the better able to help you she will be.

(4) Taking on additional debt after preapproval can indeed move your numbers around, keep the lender in the loop. A preapproval takes a snapshot in time, but a new snapshot will be taken once you go under contract. That preapproval can only ever be as good as that snapshot is & remains an accurate picture of your finances. 

(5) Ask about Freddie Mac Home Possible. It's a 95% LTV 2-4 unit program for owner occupants that is an alternative to FHA 2-4 unit for folks just starting out. You're doing yourself a disservice if you don't at least compare the two. FHA 3.5% down is more popular on BP, IMO FHLMC Home Possible is often better financing for a very similar down payment that is under-appreciated on BP.

(6) Not necessary. If your lender and that agent do not have a history of working together, the agent is purchase-focused (some agents are mostly listing agents), and the lender is purchase-focused (some lenders are refinance focused), then both will be evaluating each other for potentially doing business in the future together. So that relationship carrot is already there. If you feel well served by the agent, tell the lender, and if you feel well served by the lender, tell the agent. Real estate is about relationships, first and foremost, no matter if your an agent, real estate investor, lender, whatever.