Hannah Hammond warns commercial real estate investors against over-relying on a single bank or lender. She emphasizes that financing is time-consuming, risky, and uncertain until funds are in the account, and that repeatedly using the same lender can cost investors money by missing better options (e.g., credit unions, life insurance companies) that may offer lower rates, longer amortizations, or fewer personal guarantees.
Chapters
Big mistake that commercial real estate investors make is we all know that financing is a nightmare to get. It's a lot of paperwork, it's a lot of work, it's a lot of back and forth. It's super high risk. And I lose sleep at night over loans all the time because you just don't know for sure until the money's in the bank that that deal is going to fund. So a big mistake is people, sponsors, investors, they'll start off in their career, they'll get a loan with one bank or one credit union or one type of loan, and they will just continue going back to that bank over and over and over again. It can work out really well. But they don't know what they're missing because there might be another bank or a credit union or a life insurance company or some other financing solution that could save a lot of money on the deal, maybe not have a personal guarantee, maybe have a longer amortization period, a better interest rate or other terms. And these investors that are just going to the same place every time or the same bank could be losing a lot of money from not knowing the other options or products out there.