How Debt Yield affects your commercial loan sizing

Monday, September 16

Last year we wrote up how Debt Service Coverage Ratio (DSCR) affects the maximum size of a commercial loan. The quick summary is that, regardless of a lender’s stated maximum LTV, if there’s not enough cash flow in the asset to safely cover their loan payments + a predetermined margin, that will...


Three less obvious reasons lenders turn your deal down

Wednesday, August 14

Underwriting relies on a lot of math and data. Lenders measure an asset’s performance, market data that may affect the future of that performance, and the borrower’s financials. There is a lot of documentation collected to originate your typical commercial mortgage, plus an official, third-party...


Interest Rates Don't Matter

Tuesday, August 06

Well, they are important in the long run, but their significance pales to other terms in certain scenarios. I need to make this point clear: Interest rates on a construction or short-term repositioning loan matter very little. In fact, increasing the interest rate a competitive bank will charge (...


Everything “raising equity” could mean for a real estate deal

Wednesday, June 26

There’s a building, and you want to buy it. It’s a great investment and you’re projecting awesome returns. You have about 10% of the acquisition price available in cash. You know you can get a loan for 70–75%. That means you’re short 15–20% of the purchase price, and you do NOT want to miss this ...


Why commercial mortgage pre-approvals don't exist

Wednesday, May 29

When a consumer is shopping to purchase a home, obtaining a mortgage pre-approval is a typical part of the process. The pre-approval helps the buyer determine how much they can afford to spend on this major purchase ahead of time. The process works the same for a real estate investor buying a hom...


Gaining trust with accurate real estate financial models

Monday, May 20

The following is a guest post from Max Garbus, Vice President at St. Petersburg, Fla.-based CREModels. He can be reached at [email protected] estate developers and investors constantly compete for attention with other professionals in the business, like brokers, other investors, lenders and ...