The amount and the plan disagree
A requested loan may exceed what current income, value or cost can support. Show each sizing constraint and the cash required to close. If an appraisal is lower than expected, determine whether reduced debt, additional equity, a revised price or a different plan is feasible.
The sponsor is stretched across several deals
A property can appear well capitalized while its sponsor faces other guarantees, maturities and capital calls. Present the schedule of real estate owned and explain where additional funds will come from if the budget or timing changes.
Carry runs out before the exit
Lease-up delays, expiring rate caps and reserve exhaustion can turn a manageable budget into a new funding need. Model interest, taxes, insurance and operating deficits through a delayed exit. Identify a contingency before the reserve is exhausted.
The documents prevent the proposed structure
Senior debt may restrict mezzanine financing, preferred equity, ownership changes or additional guarantees. Cross-collateralized loans and condo releases can complicate repayment. Review consent requirements, release prices and intercreditor rights before treating junior capital as available.
The exit needs a second assumption to succeed
A refinance can depend on both higher income and a lower future rate. A sale can depend on permits, a certificate of occupancy or unit absorption. Separate the base plan from a downside case and show what happens if one milestone slips.