Having problems with delayed financing from Quicken Loans

[Trevor Aydelott]

So I just purchased a home in Colorado and I'm trying to accomplish the BRRRR strategy.

I had a couple lenders lined up. But decided to go with Quicken Loans as they were possibly a cheaper interest rate. 

They told me they had to run my credit before telling me the exact interest rate. Which I get. 

But now basically saying they cannot do it. Really this is ticking me off because it has nothing to do with my credit, DTI, or anything like that.

Is anyone else having problems like this? 

[Andrew Postell]

@Trevor Aydelott very sorry that something like this occured.  Unfortunately, this is all too common.  Many lenders just don't understand how we structure deals and even if we try to explain it to them...they can't do it.  Which is why we usually recommend to work with smaller, local lenders because they are more flexible.  If the rate is lower but you can't do the loan...what's the point?

The first recommendation I would have is to lean on other investors in your area (or the area of the properties) and Bigger Pockets has great state forums where you can ask other locals who they have used.

Now, even upon a recommendation I would HIGHLY recommend asking a specific set of questions to guage if they are "investor friendly".  I've included the list below...but be very wary of answers that sound something like "I don't know, let me check".  I mean, maybe if they can check with you and find the answer in 30 seconds because they know exactly where to look and they just couldn't remember off the top of their head....that's fine.  But if they have to go ask "management" or "underwriting"...that would be a red flag.

Also, I wrote an entire post on how you should be structuring your cash purchases so they are more friendly on rate for you and lending for banks.  You can read that article that I wrote for Bigger Pockets HERE. Let me know if you have any questions on it.

And here's the questions I would ask:

Questions for Lenders

1. When do you start using rental income to help me qualify? (the answer needs to be immediately)
2. When do you start using “After Repair Value” on my property?
3. How long do you need me to be on title to refinance? (this is important if you do need a short term loan to purchase then refinance out - and the answer should be 1 day...very important that it is 1 day on title is all that is needed to refinance)
4. What is my minimum down payment required? (if they only require 15% down on a single family home that is usually a good sign that you are working with a flexible lender)
5. How many loans can I have with you?
6. Can I change title to my LLC?
7. Do you sell your mortgages?
8. What is your loan minimum?
9. Can you explain to me what your reserve requirements are?