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Does My Credit Score Matter For Commercial Real Estate?

If you are a real estate investor that is new to the commercial lending space, you might be wondering why lenders would want to know your personal credit score.

It drives me a little bit crazy when I hear the “gurus” selling training programs that commercial is brilliant because it is just asset-based lending, and all that matters is how the real estate performs…

It is only a half truth.

It makes sense that lenders base decisions on your property’s financial performance, cost […]

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3 Reasons Syndicators Should Embrace Mandatory Lender Reserves

Have you ever run out of gas? I’m not talking the figurative gas tank, but the literal one we have in our vehicles. (Tesla owners sub gas for electricity…)

I had a truck years ago that frequently over-stated the amount left in the tank and one time it got the better of me. Embarrassingly enough I ran out of gas. Such a pain to pull off to the side of the road, walk to the nearest gas station, spend a […]

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non-recourse multifamily loans

The Difference Between Recourse and Non-Recourse Loans

I don’t have the exact quote, but the star quarterback turned real estate mogul Roger Staubach was asked about his biggest regret in building his real estate portfolio. His response was he wouldn’t have used debt with an unlimited personal guaranty attached to it. He felt that over years of experience a non-recourse approach was preferred.

That said, the point of this article isn’t to judge the merits or pitfalls of either recourse or non-recourse loans, but to provide context […]

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multifamily reserves

To Reserve or Not to Reserve, That is the Question

With the rise of the COVID-19 pandemic, operating and capital reserves have become a topic of discussion for apartment syndication sponsors and investors alike.

For some, today’s uncertainty is a chance to brag about their foresight in raising a large war chest for tough times, while others fear they will soon pay the price for their lean reserves.

We have certainly seen a change in reserve requirements for multifamily loans, but more on that later.

You may wonder why sponsors don’t simply […]

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PFS & SREO

Want a Good Personal Financial Statement?

We all know the saying – “You never get a second chance to make a great first impression.”

The purpose of this article is to help you make your first impression with your mortgage broker or loan officer a great one.

And how do you do that?? You have a current and complete Personal Financial Statement filled out and ready to share.

The starting point for all commercial real estate loans is the Personal Financial Statement (PFS) with a Schedule of Real […]

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Commercial Loan Prepayment Penalties Unwrapped

Nothing says romance quite like a prenuptial agreement does it?

That comment is certainly facetious, but sets the stage for an analogy regarding the prepayment penalty aspect of commercial loans. It is important to understand what you’re getting into with your loan. The loan documents explain all the terms of the loan, and the prepay piece is really the predetermined cost of breaking up with a lender.

A prenuptial agreement defines and outlines what things will look like in the event […]

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10 Biggest Mistakes Made When Seeking Multifamily Agency Financing

There’s lot of interest in Agency (Fannie Mae and Freddie Mac) debt in the multifamily universe these days. Because these loans limit your personal liability, net you higher cash flow, allow higher leverage (larger loan amounts) that increase your returns, provide you more surety of future results, and allow for virtually unlimited growth – there’s a lot to like.

These bank-beating features such as non-recourse, 30-year amortization, low interest rates, up to 80% leverage, long fixed terms, and interest only […]

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