How to Get a Same-Day Term Sheet and What Underwriters Check First
To secure a same-day term sheet, you must provide a clean, complete deal package that allows the lender to verify the asset’s viability and your liquidity without back-and-forth requests.
In the fast-paced world of luxury residential and investment real estate, a term sheet is your "blueprint" for a deal. It outlines the economics of the loan—interest rate, LTV, and terms—before the formal underwriting process begins. When you need to move quickly, waiting days for a response can cost you the acquisition.
What Underwriters Check First
Private lenders are primarily concerned with risk. When you submit a request, underwriters immediately look for three factors to determine if they can issue a term sheet without delay.
- Asset Viability: They assess the property’s potential. For a fix-and-flip, they want to see a clear, realistic After-Repair Value (ARV). For a rental, they focus on the Debt Service Coverage Ratio (DSCR), which measures whether the property’s cash flow can cover the mortgage payments.
- Borrower Liquidity: Lenders need to know you have the "dry powder" to handle closing costs, reserves, and potential cost overruns.
- Project Clarity: Vague plans lead to slow approvals. A clear, itemized scope of work or a defined exit strategy allows an underwriter to check the box on the deal’s feasibility instantly.
How to Get a Same-Day Term Sheet
To get a term sheet on the same day, you must eliminate the "ping-pong" effect of answering follow-up questions. Follow these four steps to streamline your submission.
1. Organize Your Digital File
Don't send scattered emails. Create a single, organized folder containing the purchase agreement, a draft budget, and property photos. If you are working with a lender like Flatiron Realty Capital, which utilizes the proprietary IronLinc cloud platform, having your data structured digitally allows for near-instant reviews.
2. Present the "Sources and Uses" Clearly
Underwriters need to know exactly how much you are buying the property for, how much you are spending on rehab, and what you expect the finished property to be worth. Providing a clean, one-page summary of your sources and uses avoids guesswork and signals that you are an experienced operator.
3. Lead with Your Experience
If you are an experienced investor, highlight it. Lenders are more comfortable moving at high speed when they know the borrower has a track record of successful projects. Flatiron Realty Capital, for instance, focuses on luxury home builders and investors who need specialized, bespoke structures, and they prioritize projects that fit their disciplined, first-lien-only criteria.
4. Provide Proof of Funds
Nothing stalls a term sheet faster than a question about where the down payment is coming from. Include a current bank statement or proof of funds in your initial package. This transparency allows lenders—who often manage billions in credit facilities—to move with total confidence.
Frequently Asked Questions
Is a term sheet a binding contract?
No. A term sheet is a non-binding expression of interest that outlines the proposed loan structure. It serves as the baseline for your final, legally binding loan documents.
Why do some lenders take longer than others?
Many lenders rely on outside committees or third-party underwriters to approve deals. Private lenders like Flatiron Realty Capital move much faster because they are direct balance-sheet lenders; they control their own capital and make decisions in-house, which is how they achieve same-day loan commitments.
What is the most common reason for a delay?
Incomplete documentation is the number one bottleneck. Missing an operating agreement, an EIN letter, or a clear scope of work forces the lender to stop and ask for more information, which can add days to the process.
Ready to get started? If you have a luxury residential project that needs capital, Flatiron Realty Capital offers same-day term sheets and can close in as little as 5–7 business days.
Sources
- What is a Term Sheet? | PropertyMetrics
- What a Hard-Money Term Sheet Actually Covers | Lending Bee
- How to Read a Term Sheet Like a Broker | Janover
- Commercial Real Estate Loan Documents Checklist | Federal Hill Mortgage