Mistake 1: Treating the Exit as a Hope
Private capital is underwritten around the exit. “We’ll refinance later” is not a plan. Lenders test refinance feasibility, market liquidity, and time-to-exit assumptions.
Mistake 2: Overleveraging
Excessive leverage reduces lender appetite and increases scrutiny. Conservative structures typically execute faster and cost less in the long run.
Mistake 3: Incomplete or Unclear Packages
Private capital is fast when the story is clear. It slows down when documents are missing or numbers are inconsistent. A disciplined package signals disciplined execution.
Mistake 4: Confusing Private Money with “Hard Money”
Private money can be relationship-driven and mandate-based. Hard money is often marketed broadly and priced aggressively. Both can work—but the correct choice depends on the deal, timeline, and sponsor profile.
Mistake 5: Mispricing the Timeline
Time-sensitive closings require preparation. If the schedule is tight, the package must be tighter.
What “Good” Looks Like
- Clear collateral narrative
- Conservative leverage
- Exit supported by facts
- Borrower/sponsor capability aligned with the plan
Quiet conclusion: Private capital rewards clarity. Most problems can be avoided with disciplined structuring before submission.