CRE Mini Case Practice
Practice a 60–90 second answer. The goal: size to downside, confirm the exit, and map structure to risks.
The mini-case framework
Answer order (60–90 seconds)
- Deal story + business plan
- Downside sizing (debt yield)
- Exit underwriting (stressed cap + realistic takeout rate)
- 2–3 key risks (timing / NOI / market)
- Protections (reserves / cash mgmt / milestones)
The mini-case
Deal summary
Read this once, then practice speaking your answer out loud.
- Asset: 220-unit multifamily, suburban major metro
- Occupancy: 87% today (target 94%)
- In-place NOI: ~$2.8mm
- Business plan: $6.0mm capex to renovate units + improve leasing
- Stabilized NOI: ~$3.6mm (sponsor view)
- Request: $40mm senior bridge, 30-month term, IO
- Sponsor: 6 deals completed, but only 1 in this exact market
What the interviewer asks
What they’re testing
Can you size quickly, identify what breaks the deal, and protect the lender with structure.
Prompts
- How would you size the loan?
- What’s the biggest risk?
- How do you underwrite the exit?
- What structure would you require?
What a strong answer includes
- Downside constraint (DY / DSCR)
- Exit at stressed cap + realistic takeout rate
- Timing + market + NOI risk
- Protections mapped to each risk
Model answer (copy this style)
A lender-style answer
“This is a transitional MF deal with a clear capex and lease-up plan. I’d size to a downside debt yield using conservative NOI (closer to in-place plus partial credit, not full stabilization), then cross-check DSCR at stressed rates and confirm takeout clears at a realistic cap and refi rate. The key risks are timing (lease-up takes longer) and market (cap rates / takeout tighten), so I’d want an interest reserve sized to the timeline, capex controls, and springing cash management with leasing milestones. If the exit doesn’t clear under stress, I’d reduce proceeds or pass.”
Show numbers (lightly)
In-place NOI$2.8mm
Target downside DY8.5%
Implied max loan~$33mm
Then say: ‘I’d verify refi proceeds at stressed cap/rate clear the loan.’
Follow-up questions that sound senior
Ask these (or use them in your write-up)
- What’s the critical path item (permits, unit turns, leasing velocity)?
- What’s Plan B if stabilization slips past maturity?
- What concessions and renewal assumptions are in the pro forma?
- What is the sponsor’s track record on this exact plan?