I. Clear Short Answer
The quality of your questions determines the quality of your lender.
Most investors ask, “What’s your rate?” and stop there.
That is like asking for a car price without knowing which car you’re buying.
If you want the right funding partner, the goal isn’t just to find a lender who will say yes. It’s to find one who’s the right fit for your strategy.
II. Key Questions by Category
| Category | Why It Matters | What You’re Looking For |
|---|---|---|
| Getting to Know Them | Fit for your strategy | Experience with your deal type |
| Loan Basics | Qualification clarity | Clear underwriting rules |
| Fix & Flip | Speed + leverage | ARV-based lending, fast draws |
| Buy & Hold | Cash flow stability | DSCR clarity + rental rules |
| New Construction | Execution ability | Draw process + builder requirements |
| Unique Offerings | Flexibility | Options that support scaling |
| Process & Timeline | Deal safety | Clear path from app to close |
| Long-Term Relationship | Scaling support | Ability to grow with you |
III. Step-by-Step: How to Interview a Lender
Step 1: Clarify What They Actually Do
Ask:
• What deal types do you specialize in? (Fix and Flip, Rentals, New Constructions, etc.)
• What is your flagship product?
• Are you a direct lender or a broker?
• Do you lend in my market?
• Do you work with new investors?
If they cannot clearly explain their niche, that is a red flag.
A lender who only does fix and flip loans may not help you exit into a long-term loans like DSCR loans later.
Step 2: Understand the Loan Basics
Before you waste time, ask:
• Minimum and maximum loan amount
• Minimum credit score
• Minimum down payment
• Liquidity and cash reserve requirements
• Do they lend to LLCs?
Clarity here prevents surprises during underwriting.
Step 3: If You’re Flipping, Go Deep on ARV and Draws
Ask:
• What is your max LTC(Loan to Cost) on purchase price?
• What is your max LTV(Loan to Value)?
• How are draws handled?
• How fast are draws funded?
• Are extensions available?
• Do you allow a credit or capital partner?
Speed matters in flips.
If draws take three weeks, your contractor sits idle and your holding costs go up.
Step 4: If You’re Buying Rentals, Focus on DSCR
Ask:
• What DSCR(Debt Service Coverage Ratio) is required?
• How is rental income calculated?
• Do you accept short-term or Section 8 rents?
• Is there seasoning required for refinance?
• Do you allow partners?
If your lender does not understand your rental strategy, they will not structure it correctly and help you maximize your leverage if that’s your goal.
Step 5: Ask About Process and Timeline
• What documents are needed upfront?
• What kills deals most often?
• Who is my point of contact?
• Do you offer proof of funds letters?
• Typical time to close?
If they cannot explain their process simply, expect confusion later.
IV. Deep Dive: What These Terms Actually Mean
LTC
Loan-to-Cost. 90% LTC means the loan amount is 90% of the purchase price.
LTARV or LTV
Loan-to-After-Repair-Value. Percentage of projected value funded. 75% LTV means the loan amount is 75% of the after repair value of the property.
DSCR
Debt Service Coverage Ratio. Rental income divided by total monthly payment. If your rental income is $2,000 your monthly PITI(principal, interest, tax, insurance, HOA if applicable) should be equal or less than the income. Some lenders will qualify you even if it’s lower.
Liquidity
Cash available to be able to close and pay for 2-3 months of PITI.
Seasoning
Time you must own a property before refinancing. This applies to BRRRR(buy, rehab, rent, refinance, repeat) investors fixing up properties and then turning them into rental properties.
If a lender cannot clearly explain these, they may not understand them deeply.
V. Common Mistakes Investors Make
Mistake 1: Only comparing rates
The cheapest rate can cost you the most or even a whole deal.
Mistake 2: Not asking about draw timelines
Delayed draws eats up your profit.
Mistake 3: Ignoring refinance strategy
If you BRRRR, your exit matters on day one.
Mistake 4: Not asking about scaling
Some lenders limit portfolio growth.
Mistake 5: Not watching communication
If responses are slow now, imagine closing week.
VI. Borrower Checklist: Lender-Ready Interview Notes
Before choosing a lender, confirm:
• Clear loan structure
• Clear ARV or DSCR rules
• Transparent fee breakdown
• Defined timeline
• Named point of contact
• Extension policy
• Exit strategy alignment
The goal is not just approval.
The goal is finding a lender partner you can build a long term relationship with!
VII. FAQ Cluster
Should I use a broker or direct lender?
It depends. Brokers can shop options. Direct lenders control underwriting internally.
What DSCR ratio is required?
Most lenders look for 1.20 to 1.25.
Do I need perfect credit?
No. Deal strength often matters more than a perfect score.
Can I partner with someone?
Many lenders allow credit or capital partners. Always ask.
What kills deals most often?
Low appraisal, weak ARV support, unclear liquidity, slow documentation.
Do lenders refinance their own flips?
Some offer in-house BRRRR exits. This can simplify your strategy.
How fast should a fix and flip loan close?
7 to 14 days is common for experienced lenders.
VIII. Glossary
ARV
After Repair Value. Estimated value after renovations.
LTV
Loan to Value. Percentage of purchase price funded.
LTARV
Loan to ARV percentage.
DSCR
Debt Service Coverage Ratio. Rent divided by total monthly payment.
Liquidity
Cash available after closing.
Draw
Rehab funds released in stages.
If you already have your purchase, rehab, and ARV numbers, I am happy to run through the structure with you and help you interview your lender properly.
Book a quick call and let’s strengthen your deal before you submit it.
About the Author
Dahae Yi is a commercial loan officer and real estate funding educator specializing in fix & flip and BRRRR financing. She teaches investors how to structure lender-ready deals and offers flexible, relationship-based funding terms that improve as the partnership grows. Her content is designed to help investors scale faster, avoid common funding mistakes, and secure funding with confidence.
Follow Dahae Yi on Instagram @dahaeyi.lender — Hard Money & DSCR Lending Tips
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