AH BANKS! Pardon My French – Part 2

Given that it has been 2+ years since we went through the process of purchasing our primary residence (and the Pensacola real estate market seems to be recovering), I was optimistically hopeful dealing with banks wouldn’t be as painful this time around…boy was I wrong!

real estate investing Pensacola

In AH BANKS! Pardon My French – Part 1 I discussed our primary residence purchase and the struggles of doing business with our chosen lender. Below is a recap of our conventional loan process to purchase a long-term duplex rental property in Gulf Breeze.
Given that it has been 2+ years since we went through the process of purchasing our primary residence (and the Pensacola real estate market seems to be recovering), I was optimistically hopeful dealing with banks wouldn’t be as painful this time around…boy was I wrong!

Our Gulf Breeze Long-Term Rental Property Purchase:

  •  Down Payment of 20% (check)
  •  Credit Score of high 700s, low 800s (got it)
  •  Pre-approved with a regional Credit Union with a large local presence and really good interest rates (check)
  •  Occupied? Yes, both units of this duplex are under long term agreements with no indications/desires to leave.

A side note: while many Pensacola realtors require you to be pre-approved before showing you a house, you can certainly find realtors who don’t require this proof. Just know, obtaining pre-approval shows the realtor you’re serious about buying and typically is painless (mostly just a credit score check by your lending institution).


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Timeline (the boring details):

  • February 24: Pre-approval received from chosen Pensacola credit union
  • February 27: Entered into contract with a 30 day close date. Escrow provided to closing agent and copy of contract sent to our chosen Pensacola credit union.
  • March 7: Loan application process started (YAY!!)
  • March 14: I followed up with the CU to see how things were processing and promptly received “We are all set for now.” Hearing this during AH BANKS! Pardon My French – Part 1, my internal warning sirens start to go off.
  • March 22: paid for property appraisal through the CU
  • March 28: received confirmation that all initial qualifying documents were received and will now go through pre-underwriting process. Unfortunately this was accompanied with a need to extend the closing to May 9th. of which the seller did not want to do. Thanks for a great realtor for making this happen but my internal warning sirens are starting to get louder.
  • April 1: my loan application is transitioned from the Loan Officer to now the Loan Processor
  • April 12:  no communication in weeks, I receive notice that my loan processor is working toward final loan approval.
  • April 21: where the real fun begins…the loan processor comes back to ask me for previous years tax statements (which I’ve already supplied) and to let me know the appraisal has not come back yet. Since we’re 30 days past from when the appraisal was ordered, no sign of it being completed was frustrating. What’s even more frustrating, the Loan Processor didn’t know what to do. C’mon man?! I immediately sprung with questions like: Who ordered the appraisal within your firm? What’s there #? Who’s your boss? Who can we escalate that to? Give that to me and I’ll do it!
  • April 27: ONE WEEK LATER! The appraisal was finally received, but WAIT, there’s more! We still need your most recent tax return!  Ummm….no you don’t. I’ve uploaded to your portal twice now and receive the thumbs by your boss twice now Ms. Pensacola Loan Processor. Here I’ll upload again for you, just so you don’t have to look for it. There, you see the date of today’s date on the document in the portal? That’s it. Click on it and tell me if that’s what you’re looking for! Needless to say I was pissed.
  • May 1: I start daily calls to the Loan Processor and to the Branch LO Manager to receive status updates. If they don’t answer, I leave them voicemails and start emailing them, CC’ing their bosses. Not to mention my Pensacola realtor and his team start dialing their way up the CU’s corporate chain.
  • May 7: after a week of daily phone calls, emails, and borderline harassment for someone to take my business, I finally receive the good news my loan application was approved. However, “due to new regulations…. there is a 3-day seasoning that has to happen, putting your close date on May 10”. Again, here is where having a great realtor on your side helps. They kept this deal together.
  • May 10: Closed. Two and half months after going under contract, begging this credit union to take my business, we finally closed.
If you’re exhausted from reading this, I don’t blame you. I let a couple months go by before typing it up and I’m just as exhausted reliving this horrifying lender experience. At one point during this process, I felt like Mr. Regional Credit Union was enjoying messing with me. They wanted to show me who had the power.

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Now that I can sit back and non-emotionally reflect, part of me still believes that, but part of me really believes the process is just that broken. I feel for the branch managers and loan processors as their lives are more stressed from guys like me because their system is broken.

Bottom line is this: If this is the new norm for lending institutions, then our buy & hold strategy is going to be a gold mine. Even with continued lower rates, banks and lending institutions are continuing to make it more difficult to do business with them.
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