c/cre-financing

16

abbyd36•1d ago

The broker who talked me out of a $2M deal in Dallas

I was sitting in a coffee shop in Dallas last spring, about to sign off on a mixed-use property with a bridge loan that seemed perfect. The broker, an older guy named Rick, pulled me aside and said, "You got the right numbers but the wrong lender for this one." He spent 20 minutes showing me how the prepayment penalty would eat my exit strategy alive if I refinanced early. I pulled out of the deal, and three months later rates shifted and that bridge lender changed their terms hard. Has anyone else had a broker save them from a bad deal like that?

3

jenny_jackson•1d ago

Realized I was overpaying for DSCR loans by not checking the spread first

I spent two years just going with whatever rate my local bank quoted me on DSCR loans. Then last month a buddy in Atlanta showed me his terms from a different lender and I was paying 1.5% more. Turns out I never shopped around because I thought the first quote was standard. Has anyone else gotten burned by sticking with one lender too long?

14

lily_schmidt53•1d ago

Just had a loan officer ghost me after 3 weeks of paperwork

Spent the better part of a month gathering tax returns, rent rolls, and bank statements for a small strip mall in Phoenix. The guy at First Federal seemed real interested until I sent everything over. He stopped returning emails and calls last Tuesday. Has anyone else had a lender just vanish like that on a deal under $2 million?

24

taylor.susan•1d ago

Took me 2 years to admit my tenant was right about the rent bump

Back in 2021 I had a small office building in a suburb of Cleveland and I was dead set against raising rents even though my costs were going up. Thought I was being the good guy landlord... tenant kept telling me I was leaving money on the table. Finally ran the numbers after my insurance jumped 12% and realized I was actually losing ground. Raised rents by 8% across the board in 2022 and nobody even blinked. Anybody else hold out on a rent adjustment and regret it later?

2

avery_carr57•3d ago

Tried using a private hard money lender for a quick flip and got burned on the interest rate

Thought I was saving time avoiding banks but the guy charged me 14 points upfront and my profit margin vanished, has anyone else had better luck with bridge loans?

15

bettyh84•4d ago

Why does nobody talk about the hidden fees in debt service reserves?

I spent $4,200 on a debt service reserve for a small multifamily deal in Austin last year. Thought it was just a standard lockbox thing everyone does. Turns out my lender added a 1% annual maintenance fee on top of it, and I never caught it in the closing docs. That cost me an extra $42 a month for something I couldn't even touch. Plus they required me to keep 6 months of PITI in there, which was way more than I planned. I learned the hard way to ask for a breakdown of every single fee tied to that reserve. Has anyone else gotten burned by surprise fees on a reserve account?

17

alice808•4d ago

Mentioned my small multifamily deal to a senior lender over coffee

He said I was overpaying for a 7 unit in Phoenix because my cap rate was 5.2 and the area comps were flattening, and it made me realize I never checked the local rent growth data before I signed the LOI has anyone else had an offhand remark totally change how they look at a deal?

13

emma72•6d ago

My multifamily loan almost fell apart because of one missing document

Last Thursday I was 2 days from closing on a 12-unit in Atlanta and the underwriter flagged a missing environmental report from 2019. Had to pay $800 for a rush Phase I and it cleared, but I was sweating bullets for 48 hours. Anyone else had a deal nearly tank over a single piece of paper?

9

the_sandra•6d ago

Compared 2 lenders on the same deal. Night and day difference

I ran numbers on a 4-unit in Cleveland last month. Two different lenders. One quoted me 5.2% with 1.5 points but wanted 35% down. The other did 6.1% with 0.75 points but only 25% down. The lower rate looked better on paper. But the extra cash I kept in my pocket changed my IRR by almost 2 points. Has anyone else run into this kind of trade off with their local banks?

15

mila_reed•6d ago

PSA: Stop calling every deal 'value-add' when it's just basic maintenance

I had a borrower pitch me a 'value-add' deal last week that was literally just repainting the lobby and fixing the broken AC in a 30-year-old building. That's not value-add, that's deferred maintenance and it kills your exit cap projections. How do you guys define real value-add vs just catching up on stuff you should have fixed years ago?

7

patel.leo•7d ago

Appreciation post: the bank that actually read my underwriting memo

Spent 4 hours on a 12-unit deal in Phoenix, packed every detail into the memo including the rent roll comps and deferred maintenance plan. The underwriter called me back in 2 days with exactly one question about the cap rate source. Has anyone else had a lender that actually looks at your work instead of just running the numbers through a template?

21

black.jordan•7d ago

Question about SBA 7(a) prepayment penalties - am I missing something?

So I was reading through my loan docs for a small multifamily deal in Tampa, and I noticed the prepayment penalty on a 7(a) loan is way stiffer than I expected. Like 5% if you refi or sell in the first 3 years. But I always thought these loans were supposed to be borrower friendly compared to traditional CRE loans. I found this detail buried in the SBA SOP 50 10 7 on their website. Is this normal, or did I just get a raw deal? Anyone else run into this and find a way around it?

14

logan648•10d ago

I used to underwrite deals just based on gut feeling and a quick napkin math, but after I got burned on a $450K mixed-use property in Denver back in 2019 I now run every number through a DSCR model before I even call the broker.

What changed for you guys when you started getting serious about deal analysis, was it a specific loss or did you just gradually get more careful over time?

10

kelly.keith•11d ago

Rant: A loan officer told me my DSCR was fine until it wasn't

Had a call with a local bank in Nashville last week. The guy on the phone spent 20 minutes telling me my debt service coverage ratio was solid, we were good to go on a small multifamily refi. Then he emails me the next day saying underwriting flagged it because my operating expenses were too low compared to market comps. I asked why he didn't catch that on the call. He said 'it's a different department.' Real helpful. Has anyone else had a preapproval fall apart after someone said it was fine?

15

skylerm55•12d ago

PSA: Fixed rate spreads are tightening faster than I expected

I was shopping a deal in Houston last week and the lender quoted me 165 over swaps on a 10 year fixed. Three months ago that same bank was at 185 over for similar quality multifamily. Anyone else seeing this compression on rate locks right now?

16

seandavis•16d ago

Rant: That 'net operating income' number on the pro forma is never what it ends up being

I was looking at a deal in Raleigh last week, a 12-unit building... the seller had the NOI at $85k. But then I started digging into the actual tax records and the water bills from the last 18 months... turns out they were estimating vacancy at 3% and expenses were way under what they should be for that area. Actual NOI was more like $62k once you factor in real property management costs and the deferred maintenance on the roofs. Has anyone else found a big gap between pro forma and audited numbers on smaller multifamily?

9

seandavis•1mo ago

That $300 appraisal waiver saved me a ton of headache

I closed on a small retail strip in Ohio last month and skipped the full appraisal by paying for a waiver through a local credit union. Cost me $300 upfront instead of the usual $600 fee, and it cut two weeks off the underwriting timeline. The catch was I had to put 25% down instead of 20%, but the time savings made it worth it for me. Has anyone else used appraisal waivers on smaller deals, or do you think they're too risky in a shaky market?

25

jana_price•1mo ago

Overheard a small landlord bragging about 5.5% on a 7 year fix last week

I was at a local REIA meetup in Portland and this guy with a 4 unit building said he locked in 5.5% on a 7 year term through a small credit union. My broker never even mentioned credit unions to me. I always just went with the big online lenders. Did anyone else find better rates just by shopping local banks or credit unions? I'm up for renewal on a 6 unit next month and want to know where to look.

27

olivia_morgan8•1mo ago

Found a loophole in appraisal rules that saved my deal after the bank lowballed the value

Had a mixed-use property in Nashville appraise $80k under contract price back in March. Lender wouldn't budge. Found out you can request a reconsideration of value if you submit 3 recent comps they missed. Pulled cash-flow data from similar properties in the zip code. Bank accepted it in 5 days. Anyone else had luck fighting low appraisals with ROV requests?

6

emmag40•1mo ago

The weirdest thing I saw at a strip mall in Phoenix

Was driving through Phoenix last month and stopped at this strip mall for coffee. Saw a small CRE office wedged between a vape shop and a taqueria. Sign said "Hard Money Loans - Fast Closings." The guy inside had a gold chain and a cardboard desk. He offered me a loan on the spot just for walking in. No paperwork no credit check nothing. Said he could fund any deal in 48 hours. I just laughed and walked out. Called a buddy in Phoenix who said that guy has been investigated three times. Has anyone else run into these shady storefront lenders in random plazas?

19

sarah_brown•1mo ago

Warning: That local hard money lender who seemed too slick on the phone actually funded my flip in 3 days

I was dead set against using that guy with the flashy Instagram ads and the rented BMW. Figured no way a guy who talks like a used car salesman could handle a legit $180k commercial loan for my strip mall renovation in Phoenix. But my usual bank was dragging their feet on a 60 day timeline, and I was about to lose the option period. I gave him a shot out of pure desperation and he wired the funds in 72 hours with half the paperwork. The catch was a 13.5% rate and 3 points, but it saved my deal from falling apart. Has anyone else had a sketchy-looking lender actually come through when the clock was ticking?

12

ninah10•1mo ago

Just realized bridge loans aren't always a scam

Ngl, I used to think bridge loans were just a way for lenders to trap you in high fees. But after talking to a guy in Atlanta who used one to close on a 12-unit deal in 10 days, I changed my mind. He showed me his numbers - the 2.5% origination fee was worth it to lock the property before someone else grabbed it. Anyone else had good or bad experiences with these short-term fixes?

7

susan488•1mo ago

The DSCR loan myth I keep seeing on here

I keep reading posts where people think DSCR loans don't factor in your personal credit at all. That's wrong. I applied for one last month on a duplex in Tampa with a 680 score and the lender told me they absolutely look at your credit history, just not your W2 income. Why do so many people spread this idea that it's a free pass? Has anyone else run into this and gotten turned down?

7

carr.xena•1mo ago

Am I the only one who thinks rate caps do more harm than good?

I was at a small CRE meeting in Austin last week and a developer said rate caps just push lenders out of secondary markets, making things worse for everyone. Has anyone else seen this play out in their own deals?

11

henderson.mason•1mo ago

Chatted with a lender at a conference in Nashville last month who said I was overthinking debt.

He pointed out that I kept treating every loan like it had to be perfect when sometimes 80% of the right deal is good enough, and that got me thinking about how many opportunities I might have passed on by waiting for the perfect terms.