When applying to Private lenders for real estate investors, expect the lender to assess both the property and the proposed investment. Asset-based underwriting places significant emphasis on the collateral and the project’s financial potential, but it does not eliminate underwriting requirements. The lender needs to understand what you intend to purchase or build, how much financing you need, how much capital you will contribute and how the loan will be repaid.
Property value is a major consideration. Depending on the investment strategy, a lender may evaluate the purchase price, current value, after-repair value or expected project costs. Loan-to-value and loan-to-cost calculations help determine the proportion of the property value or total project cost that the lender is willing to finance. For renovation and construction projects, the budget and scope of work are especially important because unexpected expenses can affect completion and profitability.
Credit history may also influence eligibility. InstaLend lists a minimum FICO score of 660 for its fix-and-flip, rental and multifamily products. Construction financing has additional experience requirements, including a licensed general contractor or prior construction experience. Borrower experience can be relevant when the project involves complex renovations or ground-up building. Investors should confirm the applicable requirements for the particular product instead of assuming every private lender uses the same criteria.
The exit strategy is another key part of the review. A fix-and-flip investor may plan to sell the renovated property, while a rental investor may intend to hold it for recurring income. A bridge borrower might plan to refinance after improving occupancy and NOI. Lenders may assess whether the proposed strategy is realistic and whether the property can support the expected repayment route. Before submitting an application, organise the property address, purchase details, budget, available capital and investment plan. Understanding these requirements can help you identify potential issues early and approach lenders with a more complete application.
