All of my readers should read today's article, including commercial loan brokers, commercial brokers, real estate investors, and developers.
A couple of years ago I wrote a superb article that explains the entire commercial construction loan underwriting process in layman's English. I teach the reader the five ratio's of commercial construction loan underwriting, including
- The Loan-to-Cost Ratio;
- The Loan-to-Value Ratio;
- The Debt Service Coverage Ratio;
- The Profit Ratio; and
- The Net-Worth-to-Loan-Size Ratio
STOP! Take 42 Seconds to View This Video.
Don't panic! Don't fall asleep! I make these ratios fun!
The article is written in a playful manner that I promise will have you chuckling. We follow the story of Bubba, a developer of questionable morals, as he tries to convince his bank to make a construction loan to build an apartment building.
Prepare to learn more from this lesson than from any other training lesson that I have ever written: