Tommy DobczykOpportunity Zone Advisor, OZ Wizard · Director of Development | Certified Opportunity Zone Advisor

Construction Loans: Why They NEVER Go Second #shorts

26 May 2026 · 1 min

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0:48

Tommy Dobczyk explains why construction loans can't take second position. A subordinate loan jeopardizes the exit strategy, which depends on a strong primary loan that transfers to a developer or REIT. Tommy negotiates those terms and takes a 50% split for the value he adds.

Chapters

Are you locking up deals in the deal room? Right. I understand that. Uh-huh.
Right. So it says right here, number 4, they want to give construction loan subordination, meaning that they'll approve a subordinate second position loan. Nope, that's not how it's going to work. So, and it says right there, this could kill your exit strategy, meaning that like if we— if— because if I can get a good loan term, then I can sell that project with a loan in place that has good rates, good terms and all that to a developer and/or a REIT. Right. So they'll— That's the thing is like I'm not just selling the dirt and Katya did a great job finding this, but this is why I get 50% is because if I can structure the terms on it for the next guy that we can turn around and set them up to win. Boom, done. That's the value that I bring to the table.