We look at almost as many declined deals as approved ones. The split is rarely about the borrower or the property. Most of the deals that don’t get done are good deals that show up wrong, or run into problems on the way to closing that could have been avoided.
Here are the mistakes we see most often, in roughly the order they bite operators.
The submission is incomplete
A clean submission with itemized scope, comparable sales, and a clear exit gets a same-day decision. A submission with “rehab budget $35K” as a single line and “ARV around $180K” gets questions. Each question is a delay. The deal might still close, but you’ll wait three or four extra days while we figure out what you should have told us up front.
The fix is simple. Treat the submission like the loan application it is. Itemize the scope. Include three closed comps within a half-mile. State your exit specifically. If your deal is good, this takes you twenty minutes and saves you a week.
The rehab budget is wrong
We see two versions of this. The first is operators who under-budget the rehab to make the deal pencil. They show us a $25K rehab on a property that needs $45K of work, and the math looks great on paper. We catch it in underwriting. They either come back with a new budget that kills the spread, or they push back and try to close anyway, then run out of money in month three.
The second version is operators who don’t include a contingency line. They budget exactly what the contractor quoted, with no buffer. The first surprise (and there is always a first surprise) blows the budget. They come back asking for a budget increase. We can sometimes help, sometimes not. Plan for the surprise up front.
A real rehab budget has a line for every major scope item, market-rate pricing, and a 10 to 15 percent contingency. If your budget doesn’t have those three things, it’s not a budget. It’s a hope.
The exit isn’t real
We see this most on bridge-to-refi structures. The operator plans to refinance into a DSCR loan at month six. They don’t have a DSCR lender lined up. They haven’t run the rent comps. They don’t know what their debt service coverage will look like once the property is leased. Then month five rolls around, they start shopping refi lenders, the timeline slips into month nine, and the hard money interest keeps accruing.
If your exit is a refi, name the refi lender at submission. If your exit is a sale, support the listing price with closed comps. If you can’t say what your exit is in one sentence, your exit isn’t real yet.
Title and insurance lag
The fastest way to add a week to your closing is to wait until after the term sheet to engage title and insurance. Both take longer than you expect. Title might find a lien, a missing release, or a survey issue. Insurance might require an inspection or a higher premium than your model assumed.
The operators who close fast engage title and insurance the day the deal goes under contract, not the day the lender sends the term sheet. Front-load that work. The clock from term sheet to wire is short on our side. It’s the title and insurance side that usually drags.
The operator goes quiet
The single most preventable mistake. Submission comes in, we ask a question, the operator takes three days to respond. We send the term sheet, the borrower confirms in two days. We ask for entity docs, they show up a week later. By the time everything is gathered, we’ve burned ten extra days on a deal that should have closed in ten.
If you want to close fast, respond fast. Same day, even if the answer is “I’ll have it tomorrow.” A quick acknowledgment keeps the file moving. Silence stops it.
What this adds up to
The deals that close fast share four traits: complete submissions, honest budgets, real exits, and operators who respond same-day. The deals that stall share the opposite. Most of the stalling has nothing to do with the property and everything to do with how the operator runs the process.
Run the process well and you’ll get a yes faster than you expect, and a close that holds the timeline.