How to Raise Debt for a Real Estate Project

How to Raise Debt for a Real Estate Project

Author: Brad Johnson April 11, 2019 Duration: 26:43

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


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For those looking beyond the ticker symbols, The Alternative Investor explores the tangible and often complex world of assets that don't trade on a public exchange. Host Brad Johnson, drawing from his experience at Evergreen Capital, believes a well-rounded portfolio often exists outside the daily noise of the stock market. This podcast digs into the practicalities of private equity, real estate, venture capital, and other non-traditional avenues. While these opportunities can offer different paths to growth, they come with their own unique set of questions and due diligence. Each conversation is geared towards demystifying that process. You'll hear detailed discussions on how these investments actually work, the structures involved, and the long-term mindset they require. The aim isn't to offer quick tips, but to provide a clearer framework for evaluation. Johnson breaks down real-world cases and strategies, focusing on the critical factors that can influence an outcome. It’s a resource for anyone considering how to allocate capital towards assets that aren’t as easily quoted or sold, with the understanding that higher potential returns often walk hand-in-hand with increased complexity. Tune in for a straightforward take on building resilience and potential through alternative holdings.
Author: Language: English Episodes: 50

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