Hassle-Free Loan seems like an oxymoron doesn’t it?!?

If you have applied for a loan lately, a “hassle” would probably be the nicest thing you would say about the process. Everybody likes to blame the lender, and a fair amount of fault does belong to your lender. However, look at all of the regulatory agencies that oversee lending in real estate:

• Federal Communications Commission
• Federal Trade Commission
• Office of the Comptroller of the Currency
• Office of Thrift Supervision
• US Department of Housing and Urban Development
• Consumer Financial Protection Bureau
• State Agencies

The main problem I see with getting a hassle-free loan is that borrowers simply tell their banker the deal, email some tax returns in with a personal financial statement, and hope for the best.

Let me be very clear – this is the exact opposite of what you need to do.

If you want a Hassle-Free loan this is the process you need to follow.

1. Invest your time in the front-end of the deal so there are no surprises. Develop relationships with at least 3 different bankers that routinely make loans for investment properties. Find out what they are looking for and on what rates and terms.

2. Once you get a deal, write a quick letter (email format is fine) to the bankers talking about the quantitative and qualitative metrics of the deal.

3. Attach pro-forma financials of the deal to the letter along with your updated PFS and tax returns

In reality, by investing your time in the front-end to get a hassle-free loan you will waste significantly less time trying to shop your deal around to a bunch of bankers that don’t know you and as such are not inclined to work with you and approve your loan.

Another dose of reality, no matter how good of a deal you have, if you don’t stay in-touch with your banker(s) and tell them your goals and plans, you get lost in the weeds. I’m not going to go into the exact process a loan goes through to get approved but suffice it to say, most bankers have hundreds of loans to manage and pitch to senior bank officers for approval. If you don’t stay in-touch and don’t have your information organized in an easy format for your banker, this significantly minimizes your probability for hassle-free loan approval.

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Jimmy Moncrief is a commercial loan officer, author, and a contributor to the Hassle-Free Cashflow Investing blog.