Financed $10B+ of CRE debt in the last 5 years. Everything here comes from live deals, not theory. Rate locks that got re-traded. Covenants that blew up a refi. Lenders who delivered, lenders who didn't. If you finance CRE, follow along.

Borrower called me at 4pm Friday. Lender wants a new appraisal before closing. Value came in 6% lower than the first one. Now he's bringing $400K more to the table or the deal dies. Lesson: ask the lender if they're ordering their own or using yours. Ever get hit by a re-appraisal?

Best part of October baseball is watching managers panic. Pull the starter a batter early, everyone calls it genius. Leave him in and he gives up the lead, everyone calls it stupid. Same decision. Only the result changed. Deals work the same way. Anyone else get graded on outcomes instead of process?

Floating rate loan, borrower chose a swap instead of a cap. Locked the rate completely, gave up the upside if rates dropped. Cap costs more upfront, keeps the optionality. Which way do you lean?

Think good it will be good!

Yield maintenance on an early payoff: $340k. Defeasance on the same loan, same month: $290k. Ran both numbers before telling the borrower to wait it out. Always run both. What's the biggest prepay penalty you've seen?

CRE brokerage is really only a simple few things: 1.) Be available 2.) Do what you say your gonna do 3.) Be creative and adaptable 4.) If you don’t know the answer figure out a way to find it!

Real estate investments, ranked, according to an eviction lawyer: 1. Industrial 2. Shopping centers/medical 3. Mobile home parks (I was conceived in one) 4. Multifamily/land 5. Single family/RV parks 6. QSR/single tenant NNN 7. Big box retail 8. Office 9. Self storage 10. Co-working 11. Airbnb 12. Co-living/house hacking (seek god)

FEMA remapped a flood zone mid-underwriting. Insurance quote came back 3x higher than the borrower's last policy. DSCR barely survived it. Anyone else gotten burned by a flood zone remap mid-deal?

!!!

BIG BEN

Get Ramos out of here

Lender pulled the borrower's other properties into the underwriting, not just the subject deal. Global cash flow analysis. One weak asset dragged the whole approval. Ever had other assets drag down a deal that should've stood on its own?

Loan underwater, borrower stopped paying, lender doesn't want an REO asset either. Discounted payoff got negotiated in three weeks. Deed-in-lieu was the other option, would've taken twice as long.

Correspondent lender passed on a clean $1.8M deal. Their life company doesn't touch anything under $3M. Nothing wrong with the deal, just too small for that shelf. What's the smallest deal you've gotten done lately?

When I come across a deal that may be a fit, an interesting process plays out. I’ll spend hours on street view, looking closely at each property up and down the block, dissecting the quality of each building, its frontage, its parking, the turnover through the years, and compare all these to the property we’re looking at. As the days winds down, I’ll head to bed and find myself asking new questions I hadn’t thought of earlier - things like “how long have the competing buildings been owned, and are there people on this street than own multiple buildings.” My brain will be on this constant kick of going through different scenarios, and poking holes at my assumptions. Often I’ll wake up with a new question or new idea. “The building next door had a restaurant that lasted only 3 years from 2016 to 2019 - we need to find that old tenant and ask them what happened.” I’ll spend time at the property and in the area, speaking to the mailman, police officers, customers. This process goes on for weeks - new questions leading to answers, which lead to more questions, increasing the odds we find new ways to create value. And in the meantime our underwriting and assumptions are being updated in the background. By the time the due diligence period ends, yes we complete inspections, title reviews, etc - but more importantly, the story of the deal, the risks and the opportunity become crystal clear in my head. Due diligence goes far beyond assumptions, spreadsheets, and checking boxes. You have to get your mind deep inside each and every deal until things become obvious. You have to live the deal. The underwriting is only the beginning of the story.