In this episode of the real‑estate investing series, host Christian Osgood and co‑host Cody interview seasoned multifamily investor Terrence Doyle about securing and scaling bank debt. Cody shares his recent experience obtaining a $1.9 M loan and his goal of refinancing and eventually accessing $10‑$15 M of bank financing. Terrence outlines the fundamentals of building strong relationships with local banks and credit unions—emphasizing transparency, open communication, and limiting loan‑committee decision makers. He recounts his own path from a foreclosure‑tainted credit history to multiple $3 M loans, highlighting the importance of leading with weaknesses and presenting mitigating strengths. The conversation contrasts the capabilities of small local banks (typically capping loans around $15‑$25 M) with agency lenders (Fannie Mae/Freddie Mac), which, driven by a government mandate to keep multifamily affordable, can provide superior terms, higher debt‑service coverage ratios, and longer amortizations for larger deals. Terrence explains why multifamily remains the most liquid asset class: government‑backed agency financing ensures market liquidity even during economic downturns. He advises young investors to cultivate a few deep bank relationships, be honest about past setbacks, and leverage the “bank lever” alongside creative seller financing. The episode concludes with contact information for Terrence’s Value Add Dad channel and social media.
Chapters
No one's ever going to be as competitive as the government because their motivation is to keep the market affordable.
Hello YouTube, welcome back. I'm Christian, this is Cody, and we're joined for the last time by Terrence Doyle. I'm sure I'll be on the channel again, but last time for this series anyway. Terrence, welcome back.
It's great to be here.
It is so great to have you here. Today we're going to be talking about bank debt. Cody and I are babies in the bank debt space. We finally got our first bank loan.
I have $3 million of bank debt.
We've done it. As soon as we got one, all the other banks now want to give us debt. That was really hard to get number one done. However, Terrence has done more bank debts than we've done deals by an absolute ton.
Yeah, a lot.
And we want to talk to you about some of that. So Cody, you had a question for Terrence. I'll let you open.
Yep.
So I got my first bank loan back in November, December for $1.9 million. We're actually refinancing right now because I've got extra land. We're going to unencumber and then build on it.
Super stoked for that.
Also refinance one of my 12-flaxes. I'm getting into acquisition mode. I would like to transition a lot of the seller debts into bank debt. That is my objective. I built the creative game, and the reason I want to transition is because they'll lend me the money to buy more stuff. They're going to basically seller refinance some of my purchases going forward in the future, which I'm really excited about. However, what are the loopholes or what are the things that I need to really focus on as far as pitfalls of scaling really quickly? A 23-year-old dude trying to buy a whole bunch of stuff right now and potentially getting $10 to $15 million of bank debt. What red flags or what things do I need to watch for that could tank me in the future?
Yeah, that's a great question. It's a good problem to have. We were in the car driving in October and you were working on a bank loan and that was going to be your first refi. So congrats on getting that done. And I think anytime, you know, your first one in anything is typically your hardest, right? And so after that, you know, basically the rest of the herd follows and says, all right, we'll lend you. If they lend you, we'll lend you, we'll lend you. And, um, you know, the key— a couple fundamentals is, you know, especially in the market you're in, right? Because they're mostly tertiary, kind of similar to Des Moines. But I built some deep relationships with 2 or 3 banks in Des Moines, uh, to where, you know, they would even lend to me in Denver. And the relationship where they would drive with me in the car, they would go see the operation, they saw the financials, they saw the hustle, and they were just like an investor. They were like, hey, we're willing to make a bet on this kid when most people were not willing to make a bet on me. Right? I remember the first bank loan we did in Des Moines. We bought $3 million worth of properties, stabilized them with a line of credit, and then we went to a bank to try and refinance. And it took us a year. To pull out $3 million on our first bank loan a year. It was literally 11 months and like 20 days, painful. And I was like, oh my gosh, this is insane. Now, after we got that loan done, 3 or 4 other banks were like, hey, we want to refinance, we want to help you with your other projects. And I built relationships with guys that were in the same season of life as me, right? So guys that were 28 to 35, that were young producers at the bank that wanted to build strategic relationships, had 'Cause these guys had a base, but they were paid on production, right? Paid on production. And so it was a real alignment there of, you know, we genuinely cared for each other, we built a relationship, we communicated a lot. I told them everything going on. I think one of the big things is I was fully transparent. Hey, I'm not bankable because of XYZ. I mean, I had a, you know, one of the things that we haven't talked about is I had a foreclosure on my record. We bought a deal at an auction in 2009 and I made it my primary. And by 2011, I didn't realize there was a crack in the foundation, and basically insurance wouldn't cover it. And there was all these things, you know, foreclosures were going on everywhere. And Bank of America basically said, listen, just don't pay the note, let it go into foreclosure because we're not going to cover the foundation. And I wouldn't put money into this deal because you're never going to get it back. That's what the loan originator at Bank of America just said, let it go. So fast forward, you know, 2017, '18, I'm trying to do this refi and I had this foreclosure. So it's like I led with, hey, I have a foreclosure, I haven't done a lot of bank debt, I don't have a lot of liquidity, you know, all the reasons why you shouldn't lend to me. Now here are the reasons why you should lend to me. And so I think just being very open and transparent about any skeletons in the closet, right? We're a new company, I'm a new investor, blah, blah, blah. These buildings have a lot of deferred maintenance, or hey, these are in a rough part of town, but we know XYZ. Here are all the reasons why you should. But leading with the bad, and just a genuine relationship with the people you're working with. I'd rather have 2 or 3 really strong relationships with small banks, right? Credit unions, small local banks versus like Bank of America, Wells Fargo, Chase, blah, blah, blah. Any of the big banks, they're not gonna wanna touch you, and they're gonna have such a strict buy box and lending box, it's gonna drive you nuts. Small local banks, kinda like what you guys do on the private creative lending side, will be able to get creative and think outside the box because it's normally a loan committee of 1, 2, or 3 versus a loan committee of 8. You want as few decision makers dictating your loan as possible. So in a couple of the banks, it's like 1 or 2 people. Some of the other ones, it's 3 or 4. But in any scenario, I know all the people on the loan committee. They've come to my properties, they've been to my office, they've been to my house. We know each other personally and they've seen me operate over multiple number of years. So relationship, Transparency, communication. The more you can peel back the curtain, show them everything, I think the better position you'll be. But, um, you know, I think having leverage with banks is a really good thing. You want to be bankable with the bank. You want to be able to play both sides— creative financing with sellers, uh, seller financing— and you also want to be able to pull the lever of banks. You want to be able to get lines of credit. I mean, banks have allowed me to grow just like syndications allowed me to grow, and a much more rapid rate versus if I didn't have access to the banks that we have access to. I said, so I think it's a great thing, uh, Cody, your age, to be building relationship with banks. I think it's going to pay off big time. And I would lead with those things— communication, transparency, and, uh, you know, getting as few of decision makers at loan committee as possible. Like, that's one of my big questions when a new bank calls me. Hey, what's the loan committee process look like? How many people? And do you guys work with any smaller companies like ours that are real scrappy and kind of a startup?
And on those relationships for those very local banks, how big can you take that? Because I like to keep the end in mind. And in the, in the market that I'm buying in, the biggest potential deal I could buy, like the biggest apartment deal I could possibly buy is $50 million. That's like, that's the biggest of the biggest in Grant County. And there's only 2 apartment complexes that could ever be that big. So could I take those local relationships and get to the level where they're giving a $30 million loan, or is that not realistic?
Yeah, local banks. So that's the yin and the yang. Local banks, like, you know, the biggest, the biggest loan I currently have with a local bank is probably $15 million, and their max to any one borrower is $25 million. So I don't think that's going to be your solution. However, when you start getting in that size, you want to go Fannie Freddie. You want to go agency because they're going to give you the best terms, right? The thing with local banks is they're not going to do a 30-year AM, full-term IO. And they're not going to give you the debt coverage ratio like Fannie or Freddie. The beautiful thing— so one of my— this is a great point here to leave with the audience— is the reason why multifamily is so liquid even when the rest of the economy is shut off is it has one thing that other asset classes don't. Industrial, office, retail, land do not have this thing that multifamily has, and that is there's a government mandate to lend to multifamily properties because of affordability, right? Fannie and Freddie work on behalf of the government to lend to multifamily owners so that we keep pricing affordable because the better loan terms that they extend, the more affordable bank— the more affordable rents that operators and owners like us can offer to the market, right? So if you think about it, on office right now, there's like no liquidity because there's no government mandate to lend on office. So there's no backstop. But, you know, Fannie and Freddie have a mandate to put out something like $80 billion a year for multifamily so that they keep the market affordable. So they're able to give the very best terms in terms of DSCR, rate, and schedule, all those things, and interest only so that the market stays liquid and affordable for the end consumer, right? And so I think that's one of the big things to keep in mind when you talk about bigger deals is No one's ever going to be as competitive as the government because their motivation is to keep the market affordable.
Love it. Yeah, that's, that's huge for anybody listening. That, that's game-changing.
So that's the reason why, you know, most people talk about that, but that's one of the reasons why multifamily will continue to be the darling of all real estate asset classes is because of the lending. The government has a mandate to lend aggressively aggressively on multifamily to keep the end consumer affordable, as affordable as possible. So on larger deals, bring in a KP, call me, I'll help you. When you get to that size of deal, Cody, you're going to want to go agency, and it's not even going to be close. Banks, local banks will never be competitive in the $30, $40 million range ever.
Love it.
That's fantastic advice. Darius, we appreciate you having you on and we respect your time. So thank you so much for sharing all that you know about bank debt. And I know you have a lot more knowledge.
I'm going to say that wasn't all. Oh yeah, I know.
But opening up your vast stores of knowledge for bank debt. I will have you back on again as we get farther along and have more questions. We'll bring you back on. You can answer it because we're on— we're still level 1. We got our first couple of bank debts. We're getting through the refis. There's one thing that I want people to hear that you said is you want the bank lever to pull. We talk so much about creative finance on this channel. So if you're listening, I want you to hear this. You need to write deals while the price doesn't matter. It's just one of many terms. It needs to matter enough where you can bring that into bank debt. That is a big part of our real estate is you have these long-term balloons. Some of them are 5, which is medium term. You have 10, 15, 30-year notes, but sometimes you do in fact need to refinance out, change that product, move pieces around, right deals and make yourself bankable. It's one of the goals that you need to have regardless of how you're playing the game. Terrence, we appreciate you immensely. For everyone who enjoyed this whole series and wants to connect with you, how do they connect with you? Are you on YouTube? I know you're on BiggerPockets. What's the easiest way for them to reach out?
Yeah, we've got a new channel called the Value Add Dad. It's one of the things I'm very passionate about. So you can go check that out. We've got some interviews with you guys. Hopefully all these will be up there. So YouTube, Value Add Dad, Instagram, Terrence Doyle, LinkedIn, Terrence Doyle. And, you know, I'm like you guys, want to educate, inspire, motivate to take advantage of this amazing opportunity we have in our country. To own great real estate. And you guys are doing an amazing job. I'm a big fan. And I'm going to be eternally grateful to you guys for all the knowledge you've shared with me on creative financing. So hope the audience enjoyed this, and I look forward to doing more with you guys in the near future.
Well, hey, we appreciate you. And like I mentioned, you're the only syndicator that I advocate for. So we appreciate you.
I need that in writing, and I want that on a shirt. I need that in writing. Cody approved.
I will make a Cody Approved shirt and send it to you.
