🧑‍🎄🎄 The 7th Day of Christmas - Qualifying for the loan

On the seventh day of Real Estate Christmas, I want to talk about something that surprises almost everyone when they get started.

Qualifying for a commercial loan.

When Jennings and I first started underwriting apartment deals, we did everything “right.”

We took courses.

We ran the numbers.

We practiced the underwriting.

So we walked into the bank and asked a simple question.

“If we do a deal like this, can we get a loan?”

The answer was also simple.

No.

Not because the deal was bad. Not because the numbers did not work. But because we did not have the financial horsepower.

Here is the reality of commercial lending.

To get a commercial loan, you usually need a net worth equal to or greater than the loan amount.

You also need liquidity of around ten percent.

When we started, we were MILES away from that!

And here is the part most people don't know when they start...you don't have to qualify alone!

Commercial real estate is a team sport.

Everything changed for us when we stopped trying to do it solo and started building relationships. We met experienced partners, built trust, showed competence, and added value.

Once the right partners were on our team, the bank’s tone shifted immediately.

“Oh, these people are involved? Sure. We can do that loan.”

That is the real path forward if you are getting started.

Don't focus on what you lack...

Focus on who you need to know.

Build skills.
Show up in the right rooms.
Create value for others.

That is how relationship capital turns into real capital.

If you want to learn how deals actually get done and how teams are built, this is exactly what we break down inside the Deal Room.

Happy seventh day of Real Estate Christmas!

See you tomorrow!