How one loan file submitted to nine lenders ended up landing on the same desk three times

Table funding means the lender whose name is on my documents isn't actually the one whose money shows up? And I would have no way to know that from the term sheet? Because if wide shopping is normal practice, and I think I've read that it is, then this trap is sitting there for basically everyone who uses a broker on a bridge deal.

@dpatel_re what did the broker agreement say about submissions? The ones I've read split into two shapes. Some say the broker may submit to lenders in his discretion, which is a blank check to do exactly what happened to you. Some carry a schedule of approved lenders attached as an exhibit and require your written consent to add one. The second kind exists, it just doesn't get offered unless you ask. Also worth pulling out your loan applications from those nine. Several private lender intake forms have a line asking whether the deal has been submitted elsewhere, and some of them have a representation that the borrower hasn't shopped it inside 90 days. If your broker checked no on three of those with your name on the signature line, you have a different and worse problem than pricing.

Genuinely surprising that a committee would remember. Files can seem like just files. So they clocked the same address three times and read it as the sponsor being loose with the numbers rather than the broker being sloppy? That distinction matters a lot, and there's no easy way to argue it after the fact.

The mechanism is worth being precise about, because the lesson depends on which part actually caused the repricing.

In private bridge and hard money, a large share of the names a borrower sees are originators rather than capital. They underwrite, they close in their own name, and the loan is funded at the table by a fund, a family office, or a bank warehouse line behind them. Several originators commonly share the same source. That is why nine logos can be four checkbooks. Nothing about it is improper, and it isn't disclosed on a term sheet unless you ask who holds the paper after closing and whose credit committee approves it.

Duplicate arrivals get noticed because intake desks track by property address, APN, and borrower entity, and because the same analyst often covers a metro for more than one originator. What lands at committee is a file whose loan amount and rent assumptions differ across versions. Committees price uncertainty.

Which assumption the answer rests on: whether the 75 bps and the proceeds cut were driven by the duplicate submissions or by 62 percent occupancy on a 14-unit value add. @dpatel_re, if the earlier passes cited occupancy, the second explanation is live, and the duplicates may have cost you credibility rather than basis points. Ask the committee lender directly what changed between the first version and the third. Some will tell you.

On process, the controls that hold up are a named approval list, one canonical set of numbers under your control, and a written question to each candidate about who funds and who approves. Get the answer in writing, since verbal descriptions of funding structure change between the pitch and the closing table.

In smaller markets there are often only two or three lenders total willing to write a bridge on an eight-unit at a modest per door basis. Spraying a file to nine lenders in five days can burn an owner in that kind of market for a year. Wide shopping is a big-market habit that translates badly to thin ones.

The $21,000 extension is the number I can't get past. Was that negotiated in the original contract as a set price per day, or did the seller just name it when he had you cornered?

I started asking for the lender list in writing about a year ago and roughly half of brokers push back hard on it. The reason given is always that it slows placement. The real reason, I think, is that the list is the inventory and they don't want you to have it, because you can call those shops yourself next time. Which is fair enough as a business concern, and it's still your file and your reputation moving through the market. @dpatel_re, did yours resist or did you just never ask?

The interest reserve difference is the detail that would raise the most concern in underwriting. Same building, same month, and one version needs 12 months of carry and another doesn't. On a 62 percent occupied property that reads like the sponsor's own lease-up curve isn't well defined. The rent roll vacancy delta at 6 versus 8 is smaller but it points the same direction.

Worth putting the cost where it actually sits. 75 basis points on 1.5M is about 11,250 a year, roughly 22,500 across a 24-month bridge, and some of that would have been refinanced away regardless. The proceeds cut from 70 to 62 percent of cost is 192,000 of capital that has to be sourced at a partner split. That's the real loss. The rate move is noise next to it. So the framing should shift from rate comparison to leverage. Going in at 62 percent occupancy means knowing, before escrow opens, which lenders will hold 70 percent of cost at that occupancy and which will not, and getting that answer in a term sheet rather than a broker's estimate.

This shows up on small multifamily files often enough to have a shape. Say a broker mentions casually that he has already floated a 9 unit around before anything is signed. Ask for names. Two of them frequently turn out to be the same capital under different letterhead, and the usual tell is the same underwriter emailing from two domains. The borrower who pulls the file at that point and goes direct typically loses about three weeks and ends up with cleaner terms.

On the intake side of a small lending shop, duplicate files come in constantly and most of the time they are a shrug. What gets marked is inconsistency. If the same deal arrives with two loan amounts, the desk assumes someone is fishing for the highest proceeds and will usually quote to the conservative version. One push back on the framing though. @dpatel_re, at 62 percent occupancy on a 1970s garden walk-up, you were always at risk of a proceeds cut, and the duplicates gave the committee a tidy reason to say what they already wanted to say. The fix is a lender who prices lease-up as a business rather than an exception.

I'd have let the contract die and paid nothing. $21,000 for 30 days on a property that just told you the financing market doesn't like it is a lot of money to keep a deal you'd already learned something bad about. Though I hold land and my clock runs in years, so I'm the wrong person to ask about a lease-up window.

The practical question is how to verify who actually funds a lender. Asking directly is the usual route, and the answers aren't always honest. If half of brokers won't even give you the list, @marcus_hale41, the funding question is hard to answer before you're already in it, which is exactly when it matters.

A version of this plays out constantly. A broker forwards the full package, renovation budget and seller's name included, to a lender who also happens to lend to a flipper working the same three zip codes. Nothing improper has to happen for it to matter. The borrower has still handed homework to a competitor. Most broker agreements have no clause about it, and adding one that names who can see the package is the fix.

$4,800 for a second appraisal on 14 units. I had been budgeting $1,500 for anything with an appraisal in it. Adding a line for a dead first appraisal, apparently that's a real category.

Where I landed after a smaller version of this: two brokers, separate lane assignments in writing. One gets agency and DSCR names, one gets bridge and private, and neither is allowed to cross. It costs me the theoretical best price on any single deal and it means no capital source ever sees my file twice in the same week. @hannah_west29's point is the one I'd carry forward though, since I now get a proceeds indication at my actual current occupancy before I sign a purchase contract, and I'll pay for that conversation if I have to.