How to Raise Debt for a Real Estate Project

We’ve talked about finding deals, sourcing deals, putting a pitch deck together, raising money, and all that stuff — but we haven’t yet talked about how to go about raising debt for a real estate project.

So today, we’re going to outline how to get debt from the more conventional (or traditional) sources. We’ll be covering: seller financing, regional banks, agencies that are representing Fannie and Freddie, and large commercial mortgage-backed security loans.

Pull up a chair and join us for this real estate-centered conversation on raising debt!

Key Takeaways:

[:12] Reading our favorite funny review from the last couple of weeks!

[1:45] About today’s episode.

[2:25] The first step to raising debt for a real estate project: obtaining a loan.

[8:11] If you’re just looking to borrow money for a deal, how much should you care about the structure of the loan?

[10:16] What information is a balance sheet lender or regional lender going to need to know in order to make a decision about whether or not they’re going to lend you money?

[14:24] So which loan should you take — an agency loan or a CMBS?

[18:18] How do you know if you’re getting a CMBS loan? And what do these types of lenders look like?

[19:32] How big does a deal have to be to qualify for a CMBS loan?

[20:05] Where do the big costs come in with a CMBS loan?

[21:31] Summarizing the four sources of debt mentioned in this week’s episode and giving some final, additional pieces of information.

[23:04] In conclusion: our take on what the best options are.

Mentioned in this Episode:

Balance Sheet Lender

Fannie Mae and Freddie Mac

Bellwether

CMBS

CDO