Why deals that “look good” still fall apart at financing

[Pierre Guirguis]

I see a lot of deals stall not because the math is wrong, but because the financing side was never pressure-tested early.

A few things that have helped avoid that in practice:

• Underwrite the deal the way a lender will, not the way you want it to work: If it only pencils at best-case leverage or ARV, that's a warning sign.
• Be honest about timing: Lease-up, permits, seasoning, and appraisals almost always take longer than expected. Build that in upfront.
• Match the loan to the phase of the deal: Transitional deals rarely fit long-term debt on day one. Forcing it usually causes delays or retrades.
• Know your downside: If valuation or leverage comes in lower, is there still a path forward without panic?

One question I’ve found helpful early on:
If this gets underwritten conservatively, what breaks first?

Knowing that upfront usually saves a lot of pain later.