Every successful business transaction is built upon communication and a healthy working relationship. In real estate, professional partnerships can be integral to closing a sale, funding a deal, and effectively marketing a property.
To ensure smooth and productive collaboration in your next venture, explore a few tips for building trust with lenders.
It’s easy to approach financing from one side of the table, thinking first about what you need from the deal. However, don’t forget that the lender has their own needs to consider.
When networking with private lenders, approach the conversation ready to listen to their expectations and requirements. If anything is unclear, don’t hesitate to ask questions.
Their job is to help you understand what they’re looking for in a project to confidently assume the risks—and your job is to make a case for your project.
The first step is establishing clear expectations to understand their unique lending process and terms. This will lay the foundation for accountability and allow you to make informed decisions about how to work together.
In private money lender relationships, one of the simplest ways to earn trust is by providing accurate documentation of your financial history.
Allowing a lender to see the history of your payments and longstanding accounts will inspire confidence in your ability to repay a new loan. Sharing your previous real estate projects can also establish trust in your ability to follow through on an investment plan.
When you provide transparent and comprehensive records to support a loan application, the private lender can evaluate it with greater context. Even if your financial history isn’t perfect, being forthright will open the conversation to a well-structured, realistic deal that serves both parties.
If you’re working with a private money lender for the first time, be open and honest so they can determine how best to assist you. Even if the deal isn’t a good fit for their services, they may be able to recommend another lender suited to your project.
Even after you’ve received approval on a loan, continue to communicate through regular project updates—good and bad. It may sound counterintuitive, but if you are struggling to repay, proactive communication with your private lender will allow you to solve the problem together.
Their goal is to recover the principal, and proactive risk management will be in the best interest of everyone involved. Whatever the challenges may be, borrower-lender communication throughout the loan life cycle will help prevent default by identifying when it makes sense to restructure the loan or adjust payment schedules.
After everything else, the best way to build successful lender partnerships is by demonstrating commitment to your loan. Efforts to consistently make on-time payments, communicate, and work through challenges will serve as proof of your reliability.
When you need to finance future projects with a private money lender, your record of being a collaborative and sincere partner will earn valuable weight in your favor.
When networking with private lenders and evaluating potential partners, be sure to follow these best practices. Many hard money lenders in Orange County can help fund your real estate investments, and you should have as much confidence in their services as they do in your project.
Val-Chris Investments has offered creative loan solutions for borrowers since 1975. Get in touch to learn how our expertise in direct real estate lending can enhance your venture.