Real Estate Investing with Coach Carson #461: Why Most Investors Get Denied for a Loan (and How to Fix It)
Nov 24, 2025
In this engaging discussion, mortgage broker Brian Maddox shares his expertise on why investors often face loan denials. He highlights common pitfalls like inadequate income documentation and the nuances of DSCR loans. Brian explains how banks view income differently from investors and offers practical tips to improve bankability, such as reducing debt and preparing key documents. He emphasizes the importance of choosing the right lender and encourages seeking second opinions on loan applications. Get ready to transform your financing game!
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Three Underwriting Killers
- Most denials come from income, DSCR (rental coverage), or asset documentation problems.
- A good loan officer pre-underwrites tax returns to avoid surprises before underwriting.
Bring Two Years Of Income Docs
- Gather two years of tax returns and relevant pay stubs to document income properly.
- Lenders average and categorize income differently for W-2 and self-employed borrowers, so prepare accordingly.
Tax Losses Versus Lender View
- Lenders add back non-cash deductions like depreciation because they don't reduce bank liquidity.
- Showing tax losses can hurt underwriting unless the lender properly applies add-backs.