Step 1: Use the Same Deal for Every Lender
Pick a real property, a realistic loan amount, and an honest hold time. Send the same three numbers to every lender. If one lender quotes on a 6-month hold and another on 12, you can’t compare them.
Step 2: Compare Total Cost, Not Rate
Ask each lender for the rate, the points, and every fee. Then work out the full cost for the time you’ll actually hold the loan.
Total cost = points + (monthly interest x months held) + every fee
A lower rate with more points and fees can cost more than a higher rate with fewer, especially on a short hold.
Step 3: Find Out How They Value the Property
This decides how much they’ll lend. Some lenders order an appraisal. Some value it themselves. Some lend on after-repair value, and some only on what the property is worth today. Two lenders quoting “75%” can mean very different loan amounts if they’re working from different values.
Step 4: Ask What Happens If You Run Long
Commercial projects run long. Ask every lender what an extension or renewal costs, how many are allowed, and whether there’s a minimum interest charge or prepayment penalty if you pay off early. This is where a loan that looked cheap can get expensive.
Step 5: Test The Speed Claim
Ask two separate questions: how fast is the decision, and how fast can you close? A same-day answer is useful only if the closing can follow quickly. Ask what usually slows their closings down.
Step 6: Check Who You're Dealing With
Ask whether you’re talking to the lender making the decision or a broker passing your deal along. Look for how long they’ve been lending in Texas, reviews from borrowers, and whether the people you talk to can answer specific questions about terms without stalling.
The questions, with Larry’s answers
| Question | Larry the Lender’s answer |
|---|---|
| Rate | 12.99% standard, interest-only |
| Points | 2 on a 6-month loan, 3 on a 12-month loan |
| Other lender fees | No application fee, no appraisal fee |
| How is the property valued? | Larry’s own valuation from comparable sales; no after-repair value |
| How much will you lend? | Typically 70% to 80% for first-time borrowers; higher for repeat borrowers and prime properties; 40% to 50% on raw land |
| How fast is the decision? | Same day |
| How fast can we close? | As soon as the next day |
| Prepayment penalty or minimum interest? | Neither |
| Extensions | Loans are renewable; ask Larry what a renewal costs |
| Credit check | No hard credit pull |
| Personal guarantee | Required |
| Minimum loan | $100,000 |
| Where | Houston and Austin mainly; larger loans across Texas |
Red flags worth walking away from
Fees you’re asked to pay before you get a decision. A quote that won’t put points and fees in writing. A lender who can’t say how they value property. Terms that change after you’ve spent money on inspections. Pressure to commit before you’ve seen the full cost.
None of this means a lender is dishonest. It means you don’t have enough information to compare them yet.
Where Larry fits
Larry lends on any type of investment property in Texas, mainly in Houston and Austin, with larger loans statewide. If your deal needs a fast, simple answer on a property he can value from comparable sales, put him on your list and run the same comparison. If another lender’s total cost is lower for your deal, that’s the one to take.
