Chatted with a lender at a conference in Nashville last month who said I was overthinking debt.

He pointed out that I kept treating every loan like it had to be perfect when sometimes 80% of the right deal is good enough, and that got me thinking about how many opportunities I might have passed on by waiting for the perfect terms.

2 comments

2 Comments

simon3783d ago

and honestly they kind of had a point, but I'd push back a little on the 80% thing. That works great if you're looking at a loan for a flip or something where speed matters more than the rate. But for a long term hold on a property you're keeping for years, that 20% gap in terms can cost you a lot more than waiting an extra week to shop around. I've seen guys jump on "good enough" commercial loans that had prepayment penalties that ate up all their profit when they tried to sell early. The trick is knowing which debt actually needs to be perfect and which one just needs to be done.

sethb453d ago

Are we really acting like most people are even checking prepayment penalties before they sign?