Real Estate Tips |6 min read

Improving Your Borrower-Lender Working Relationship: 9 Best Tips

When you start working with your hard money lender, it’s essential to maintain a good working relationship with them. After all, your lender is financing your real estate project, and they are your main partner throughout the lending process. Distrust and broken-down communication can destroy even the most promising project.

If you want to cultivate a positive reputation in the real estate industry, you should start by prioritizing professional relationship-building with your lender. The hard money lenders in Maryland have an arsenal of best practices that our best lenders do. Here’s a list of them that you can follow.

Table of Contents

Consistent Communication

It’s a good professional relationship practice to contact your hard money lender at least once a quarter. Proactively pass along updates and keep them in the loop on happenings in your property renovation forecasts. For instance, if any big material changes happen to your project, you should keep your lender informed. Or, if your bigger project plans shift, you should let your lender know. Your lender will value your commitment to stakeholder management.

Let Your Lender See Your Progress

At intervals, invite your hard money loan officer to your property. This way, they can see for themselves how your funded project is going along. You can provide visible proof that their money is creating tangible results. In addition, you can encourage them to develop further stakes in your success.

Holiday Greetings

Give your hard money lender personalized holiday cards. This simple gesture shows your lender gratitude and consideration. It goes a long way toward developing a rapport with your lender.

Correct Information

Ensure that you have given your hard money lender the correct and necessary information about yourself. After all, each document contains critical financial information pertinent to your loan. These forms are like dominos that could topple your whole project if they fall. Your lender would have to pay the price for your mistake.

So, you should take the time to inspect each one for correctness. In addition, if any of these forms show undesirable results, you should offer an explanation that justifies these outcomes. Such thoroughness will foster a positive business relationship.

Be Transparent

If you run into challenges, your hard money lender should hear that directly from you immediately. They will appreciate your forthrightness and honesty. You should convey your understanding of the news’s implications. In addition, you should express your commitment to solving the problem.

Doing all this will demonstrate that you can take accountability for your actions as a businessperson. It protects your working relationship because it shows you care about how your end of the deal affects your lender.

Make Sure Your Lender Benefits

Your hard money lender is investing in your success. Lending to people involves real risk. Despite that, they put their faith in you. They gave you the resources you need to succeed in your business endeavors. Likewise, your performance will affect theirs. Lenders will be grateful if you equally reciprocate all the time, money, and effort they spend on you. As a bonus, if you reach a snag when you already have a good relationship with your lender, you will have an easier time working together to rectify the situation.

Most importantly, you should follow up on your promises to your hard money lender and return their financial investment to you.

Understand Your Loan Arrangement

Loan agreements are legally binding, and they hold massive implications for the loaning process. It’s more than worth your time to decode what the document’s terms and phrases mean. When you do this, you’re reducing the number of potential mishaps your hard money lender could face because of details you glossed over. This makes for an easier experience for your lender, and in turn, a better business relationship.

In particular, you would benefit from analyzing the document’s financial, affirmative, and negative agreements. This way, you know how to maintain your compliance with each section of the contract. Perhaps you could choose someone you trust to verify that you are complying with the contract.

Furthermore, you should stay realistic about how well you can stick to an agreement before you enter it. Additionally, you must routinely ensure that your project and finances are making progress at pace with that agreement. By doing this, you take responsibility for your project’s success, which supports your professional relationship.

Refer Your Lender

If your hard money loan manager has been a beneficial resource throughout your lending process, they deserve to get credit for their hard work. You can give this to them by connecting them with business prospects that could enrich their brand. The loan manager will find this extremely helpful. Even better, your token of gratitude will spur them on to help make your lending process go smoothly and efficiently. This contributes significantly to your business relationship-building efforts.

Make Sure Your Property Value is Accurate

Hard money lenders usually calculate their loan amounts from the borrower’s stated property value, also known as the loan-to-value ratio. Unfortunately, some borrowers can overconfidently overestimate this value. They may do this out of genuine high hopes, but life may get in the way and prevent them from meeting their expectations. In turn, this will have bad implications for the loan-to-value ratio.

If you are unable to create project outcomes worth initial estimations, you will run into trouble. You will have a harder time paying your lender back for their loan. Due to this, it’s vital to examine the property’s worth, market conditions, comparable sales, and possible renovation costs.

Needless to say, a failure to return your hard money lender’s loan will deeply affect your business relationship. You should go to great lengths to avoid this result.

Find a Lender That Values Working Relationships

You can develop your borrower-lender working relationship by staying true to your end of the rental deal and maintaining clear, consistent communication throughout the process. When you fulfill your role as a borrower, you make it easier for you and your lender to accomplish your goals.

At Maryland Hard Money Loans, we know teamwork is a two-way street. We are aware of what a privilege—and hefty responsibility—it is to be part of your property investment journey. That’s why we will always go above and beyond to make sure that your vision becomes a reality. Contact us today to work with a company that prizes customer service.


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