Private lender told me my debt coverage ratio was 'fluff' and made me strip out projected rent bumps

He wanted to see a straight 12 month trailing NOI on a duplex in Austin, so I recast the deal with actuals and the loan amount dropped by 40k, has anyone else had to fight about underwriting assumptions on value add?

3 comments

3 Comments

alexc9329d ago

Were they upfront about needing trailing NOI from the start?

masonm7029d ago

I've noticed this same thing happening all over the place lately, not just in lending. Our local hardware store started using some new inventory system and suddenly they won't stock the old paint brands people actually want because the computer says the numbers don't work on paper. It's like everybody is so focused on the neat, clean numbers they forget the real world has messy details that matter. Lenders especially just want a simple story they can plug into their spreadsheet, and they'll ignore anything that doesn't fit even if it's the truth.

kevin_harris7829d ago

Man I feel that. Sometimes you gotta just nod and smile at the computer and then go do what actually works. I've learned the hard way that if you fight the system during business hours you lose, but you can still make things happen after hours with a call to the right person.