A complete private lender submission covers scope, exit strategy, purchase contract, experience, liquidity, and credit in one package. Here is what brokers should include, and what lenders underwrite first.
A complete private lender submission includes the borrower's scope and exit strategy, a property address with purchase contract, an experience summary, a liquidity statement, and credit details, all in one package. Brokers who send these items upfront get term sheets in 24–48 hours. Brokers who send fragments get questions, delays, and lost deals.
What Private Lenders Underwrite First
Private and hard money lenders underwrite the asset and the exit before they look at the borrower. A lender asks three questions in order: what is the property worth today, what will it be worth when the plan is done, and how does the borrower get repaid. Credit and income matter, but they rank behind collateral and exit.
That ordering shapes what you lead with. A bridge loan on a stabilized duplex with a clear refinance path moves faster than a borrower with a 780 score and a vague plan. Put the deal thesis in the first paragraph of your email, not the borrower's biography.
The Submission Package: What to Include
Send everything in a single email with labeled attachments. Lenders triage dozens of submissions a day, and incomplete files go to the bottom of the pile. A strong package contains:
- Deal summary: property address, loan purpose (purchase, refinance, cash-out), requested loan amount, and target closing date.
- Purchase contract or current payoff: a fully executed contract for acquisitions, or a payoff statement for refinances.
- Scope of work and budget: line-item rehab or construction budget, with contractor name and timeline for fix-and-flip and ground-up deals.
- After-repair value (ARV) support: three to five recent sold comparables within a half mile, ideally within 90 days.
- Borrower experience: a list of completed projects in the past 36 months with addresses, purchase and sale prices, and dates.
- Liquidity proof: two recent bank or brokerage statements showing cash for the down payment, closing costs, and reserves.
- Entity documents: LLC operating agreement, EIN letter, and certificate of good standing if closing in an entity.
- Credit authorization: signed authorization or a recent score so the lender can pull a report.
For DSCR rental loans, replace the rehab budget with the current lease or a market rent analysis, plus the tax bill and insurance quote. The lender calculates debt service coverage from rent divided by principal, interest, taxes, insurance, and HOA dues. Most programs want a ratio of 1.0 or higher, and some accept sub-1.0 ratios with lower leverage.
Match the Deal to the Right Loan Product
Sending a deal to the wrong program is the most common broker error. Each product has different underwriting logic.
| Product | Primary underwriting focus | Typical term | Best fit |
|---|---|---|---|
| Fix-and-flip | ARV, rehab budget, borrower experience | 6–18 months | Value-add resale |
| Bridge loan | Exit strategy, current value, timeline | 6–24 months | Quick acquisition, transitional assets |
| Ground-up construction | Builder track record, budget, draw schedule | 12–24 months | New builds, spec homes |
| DSCR rental | Property cash flow, not personal income | 30 years | Long-term rentals, no W-2s |
A borrower who wants to keep a property long term and has no tax returns to show is a DSCR candidate, not a bridge candidate. A borrower buying a distressed property that needs a roof and a kitchen is a bridge or fix-and-flip candidate, even if the end goal is a rental. Many experienced investors use a short-term loan to acquire and renovate, then refinance into a DSCR loan once the property is leased.
Leverage Metrics Brokers Should Calculate Before Submitting
Run the numbers yourself before the lender does. Private lenders express leverage in three ways, and you should know all three for every deal:
- Loan-to-purchase (LTP): the loan against the acquisition price. Many fix-and-flip programs fund up to 85–90% of purchase.
- Loan-to-cost (LTC): the loan against purchase plus rehab budget. Common ceilings run 80–90%.
- Loan-to-ARV (LTARV): total loan against the after-repair value. Most lenders cap this near 70–75%.
The binding constraint is whichever metric produces the lowest loan amount. A deal with a low purchase price and a heavy rehab often fails on LTARV, not LTC. If your borrower needs 90% of costs but the ARV caps the loan at 70%, tell the borrower before the lender does. Setting expectations early protects your relationship with both sides.
Handling Borrowers With Credit Events or Foreclosure Risk
Private lenders lend to borrowers that banks decline, but disclosure timing matters. Tell the lender about any bankruptcy, foreclosure, short sale, or deed-in-lieu in the initial submission, with dates and a short explanation. Discovered later through a credit pull or background check, the same event reads as concealment and can kill the file.
For borrowers in active foreclosure, include the notice of default or sale date, the payoff amount, and the property's equity position. Lenders can close in days when equity is strong, since the loan is secured by the asset. Document the exit: either a sale, a refinance after curing the default, or a loan modification path. A borrower with 40% equity and a documented sale plan is financeable. A borrower with thin equity and no plan is not, regardless of urgency.
Common Mistakes That Stall Private Lender Deals
- Stale comps. Comparables older than six months or outside the neighborhood invite a lower appraisal and a revised loan amount.
- Unrealistic rehab budgets. A budget with a single "renovation" line item signals inexperience. Submit itemized costs.
- Unseasoned funds. Large recent deposits require explanation. Have the source documented before submitting.
- Entity mismatch. The contract buyer, the loan borrower, and the title vesting must align. Fix this before the term sheet, not at closing.
- Ignoring title and insurance lead times. Title issues, permit gaps, and builder's risk or vacant property policies can add a week. Order early.
Broker Compensation and Disclosure
Broker fees on private loans are typically 1–2 points paid at closing, either on top of the lender's origination fee or shared through a yield spread arrangement. Confirm the structure in writing before you submit. Some lenders pay brokers directly, others require the fee to appear on the settlement statement. For business-purpose loans, many consumer disclosure rules do not apply, but state licensing requirements still do. Check whether your state requires a broker license or a specific exemption for commercial and investor lending before you take a fee.
How to Build a Lender Relationship That Pays Off
Pick two or three lenders and learn their boxes: minimum loan size, accepted states, property types, and how they treat first-time investors. Submitting to a lender that does not fund a given state or asset class wastes everyone's time. Ask each lender for their current guidelines sheet and update your records quarterly, since leverage and pricing shift with capital markets. Close a few clean deals, and those lenders will prioritize your files and pre-clear exceptions by phone.
Private Lender Submission FAQ
How fast can a private lender issue a term sheet?
Most private lenders issue a term sheet within 24–48 hours of receiving a complete package. Incomplete submissions add days because the lender must request missing documents before pricing the loan.
Do private lenders require tax returns or W-2s?
No. Fix-and-flip, bridge, and construction loans underwrite the asset and the exit. DSCR loans qualify the borrower on property cash flow, so no W-2s or personal tax returns are needed.
What credit score do private lenders require?
Minimums vary by program, with many fix-and-flip and bridge lenders working from roughly 600–660 and DSCR programs often starting near 660–680. Lower scores usually mean lower leverage or higher pricing, not automatic denial.
Can a broker submit a deal in foreclosure?
Yes. Submit the notice of default or auction date, payoff figures, and equity analysis. Lenders can fund quickly when equity is strong and the exit is documented.
How much do brokers earn on private loans?
Brokers typically earn 1–2 points of the loan amount at closing. Confirm the fee structure and any state licensing requirements before submitting the deal.