Had a situation recently with two ground-up construction deals in Nebraska that really showed me how important verifiable experience is.

The borrower had legitimate construction experience through a GC company that had completed prior projects, so at first we thought the experience piece would be pretty straightforward. Once underwriting dug into it, the issue became proving that he personally was tied to those projects in a way the lender could verify.

The GC company had been around for years, but the borrower was added to the company later. The projects we were trying to use for his experience happened before the state-filed documentation showed him as part of the entity. We had an operating agreement showing his involvement, but that wasn’t enough because it didn’t establish, through a state filing, that he was part of the company when those prior projects were completed. So now we had two construction deals that otherwise looked workable, but the experience requirement became the sticking point.

We started looking at different ways to solve it:

• Finding state-filed documentation that could establish when he joined the company

• Pulling permits from prior projects that showed the GC

• Potentially adding another experienced party to the loan

• Looking at other ways to document the track record

The biggest takeaway for me was that there’s a huge difference between:

“I’ve been involved in multiple projects.”

and

“I can document that experience in a way underwriting can actually give me credit for.”

For anyone here doing ground-up construction, how are you documenting your track record?

Are you keeping permits, settlement statements, contracts, entity filings, GC agreements, etc. from every project?

And has anyone ever had a lender tell you that experience you considered completely legitimate didn’t count because of how it was documented?

Curious how other investors and builders have handled this.