Common Mistakes (and How to Avoid Them)
The traps that make candidates sound junior — and the simple fixes that make you sound like a lender.
The big traps
Mixing NOI definitions
Quoting debt yield on stabilized NOI without stating it. Fix: always specify in-place vs haircut-stabilized.
Over-optimistic exit caps
Using today’s tight cap rates forever. Fix: stress the exit cap and explain why.
Ignoring timing risk
Bridge deals fail on timeline, not spreadsheets. Fix: speak to critical path + reserves + milestones.
Generic ‘structure’
Listing covenants randomly. Fix: match protections to the risk you just identified.
No downside case
Only discussing the base case. Fix: show one downside and what you’d change (proceeds/structure/pass).
Hand-waving sponsor risk
Only net worth talk. Fix: liquidity vs exposure + same-deal track record + bandwidth.
How to fix 80% of mistakes instantly
Use these three sentences
- “On sizing, I’m using conservative NOI (in-place or haircut-stabilized) for downside debt yield.”
- “On exit, I’m underwriting a stressed cap and a realistic takeout rate to confirm refi clears.”
- “The key risk is [timing/NOI/market], so I’d protect with [reserve/cash mgmt/milestones].”