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M ost real estate investors know how to evaluate a deal. They look at cap rate, net operating income and price per unit. But even a promising acquisition can underperform if the loan structure works against it. Financing terms don't just affect your monthly payment. They influence cash flow, risk exposure and your ability to move on the next opportunity. In other words, you can buy the right property at the right price and still hurt your returns with the wrong loan. Whether you're purchasing your first investment property or expanding a port- folio, it pays to think about financing as part of your broader investment strategy, not just a final step in the transaction. Don't stop at the first lender who says yes Shopping lenders is about more than finding the lowest rate. It's about finding a banking relationship whose approach aligns with how you invest. When evaluating lenders, ask ques- tions that go beyond the term sheet: • Do they understand your asset class, whether it's multifamily, mixed-use, com- mercial or ground-up development? • How do they evaluate debt service cov- erage ratio, and are they willing to walk you through how they stress-test your numbers? • Can they explain how this loan could affect your ability to buy again in the future? • Will they challenge your assumptions if your projections seem overly optimistic? That last point matters more than many investors realize. A lender who asks hard questions may save you from a deal that looks good on paper but struggles in prac- tice. This is key to developing a long-stand- ing relationship that is grounded in hon- esty and responsiveness. Think two deals ahead Experienced investors don't just think about the property in front of them. They think about how the financing on this deal affects what comes next. The structure you agree to today can shape your flexibility tomorrow. For acquisitions, that means looking at whether the loan gives you enough cash flow coverage and whether a fixed or floating rate fits your hold strategy. For value-add projects, it may mean asking whether the lender offers interest-only periods during lease-up or renovation. For development projects, it means understanding how con- struction financing, draw schedules and contingencies will be handled. Construction-to-permanent financing can be especially valuable for developers. A single loan that converts at certificate of occupancy can reduce closing costs, sim- plify the capital stack and eliminate the risk of refinancing into a less favorable market. Investors should also think ahead to recapitalization. If you want the option to do a cash-out refinance later, or reposi- tion the property for your next acquisition, your current loan terms should support that strategy rather than limit it. Know what you're actually comparing When multiple loan offers are on the table, it's easy to focus on interest rate alone. But that rarely tells the full story. A more useful comparison looks at the features that directly affect performance: • Amortization: A 20-year amortization will create a much different monthly obliga- tion than a 30-year term. • Fixed vs. floating rate: Fixed rates offer predictability, while floating rates may pro- vide lower initial cost but more exposure. • Interest-only periods: These can help preserve cash flow during renovation, lease-up or repositioning. For investors building over time, those details compound. A slightly better struc- ture on one property may not seem dra- matic in isolation, but across multiple assets it can meaningfully improve cash flow and strategic flexibility. Look for lenders who can think beyond standard underwriting Conventional underwriting works well for conventional deals. But many real estate opportunities don't fit neatly into a standard box. Mixed-use properties, transitional assets, redevelopment oppor- tunities and emerging submarkets often require a lender who can think more cre- atively, offering options such as: • Portfolio loans, which can offer more flexibility because the lender keeps the loan on its own books • Bridge financing for assets that need renovation or lease-up before perma- nent financing makes sense • SBA 504 loans for owner-occupied com- mercial real estate • Cross-collateralization using equity in one property to support another acquisition In many cases, local and regional lend- ers have an advantage here. They often know the market better, can move more quickly, making local decisions as com- pared with a larger institution. Local insight can be especially valu- able when you're financing in a market where national underwriting standards don't always reflect what's actually hap- pening on the ground. The bottom line Loan structure isn't a back-office detail. It's a core part of investment strategy. The right lender should do more than approve a loan. They should be a relation- ship partner who helps you think through how financing decisions affect cash flow, risk and long-term portfolio growth. S P O N S O R E D C O N T E N T How Smart Investors Structure Real Estate Loans for Cash Flow and Growth: Why the right financing strategy matters as much as the right property By Matt Jarrell, SVP Commercial Banking Officer, Machias Savings Bank When your business is ready to move forward, Machias Savings Bank is ready to pave the way. All Roads Lead to machiassavings.bank

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