How We Underwrite Your Deal: The Three Things Every Lender Checks

Every loan request that comes across our desk gets the same first pass. Before we talk rate or terms, we want to know three things. Is the property worth what you think it is? Can you execute the plan? How does the loan get repaid? If you can answer those clearly, you will close faster with us and with any lender you work with.

1. The asset

A business-purpose loan is secured by real estate, so the property comes first. We look at the purchase price, the as-is value, and for a renovation or new build, the after-repair value (ARV).

• Comparable sales. We want recent, nearby sales of similar size, age, and finish level. A comp from a different school district or a much larger house will not hold up.
• Condition and scope. The rehab plan has to match the property. A cosmetic budget on a house that needs a roof and a new electrical panel is a red flag.
• Marketability. How long do similar homes sit on the market? A strong ARV means little if the property takes nine months to sell.

The appraisal is the final word on value, but we form our own view early. If your numbers and ours are far apart, we will tell you before you spend money on a full appraisal.

2. The borrower

Business-purpose loans are asset-based, but the person running the project still matters.

• Experience. How many deals have you completed in the last few years, and were they similar in size and scope? A first flip is not a deal breaker. It may mean lower leverage or a stronger team around you.
• Liquidity. You need cash for the down payment, closing costs, interest, and a cushion for surprises. We verify it with bank statements.
• Credit and background. We run credit and a background check on every guarantor. We are looking for patterns, not perfection.
• Your team. A proven general contractor, a good agent, and a property manager if you are holding. On larger projects, the team can matter as much as your own track record.

3. The exit

Every loan has to be repaid, so we want a clear path out before we fund.

• Sale. For a flip, the ARV should support a sale price that pays off the loan with room to spare after selling costs.
• Refinance. For a rental, we check whether the property will qualify for a long-term DSCR loan once it is stabilized, based on market rent and expenses.
• Backup plan. What happens if the market softens or the rehab runs long? Deals with two workable exits get stronger terms.

What a strong submission looks like

Knowing what a lender looks for lets you package the deal before you send it. A complete package includes:

• Purchase contract and closing date
• Scope of work and rehab budget, line by line
• Comps supporting your ARV
• Track record: address, purchase price, rehab cost, and sale price or rent for recent deals
• Proof of liquidity
• Entity documents for the borrowing LLC

Send us that package and you will have a term sheet within 24 hours. That turnaround is guaranteed, and it is one of the things we take the most pride in. A complete file is what makes it possible.

Why PK reads your deal differently

Our team includes construction professionals, not just loan officers. Our partner Greg Huegel oversees construction, budgets, and site execution, and co-owns a building company. When we review your scope of work, we read it the way a builder would. That means fewer surprises at the draw stage and a lender who understands your project.

Our blog goes deeper on each piece: how leverage is sized, how draws work, how DSCR loans qualify, and how to avoid the problems that stall deals. If you have a deal in front of you now, send it over. We will give you a clear answer on how we see it.