In this episode of the Freedom Investor Podcast, Matt interviews Beau Brehm from CBRE about the intricacies of financing commercial real estate. Beau explains his background and role on the debt and structured finance team, where he assists developers and investors with securing loans for acquisitions, refinances, and construction projects. Matt and Beau delve into the specifics of evaluating a commercial property in Northwest Houston, highlighting the differences between short-term rental properties and commercial real estate in terms of financing structures. They cover key terms like triple net leases, where tenants assume all operating expenses, making this model attractive for landlords. The conversation also explores the factors lenders consider when sizing loans, including loan-to-value ratios and debt service coverage ratios. They discuss the nuances of interest rates, loan terms, and amortization periods, stressing the importance of understanding tenant financials and market rents. Beau elaborates on different capital sources, including banks, credit unions, and life companies, noting their respective pros and cons. The discussion includes the importance of compensative vacancy factors and potential additional costs like property management fees. Beau also underscores the significance of the borrower’s net worth, liquidity, and experience in securing a loan. They reflect on the current market conditions, highlighting that while interest rates have risen, demand for industrial and multifamily assets remains strong. The episode concludes with a detailed analysis of potential cash-on-cash returns and the impacts of interest rates on investment metrics. Beau invites listeners to reach out to him for further assistance with their commercial real estate financing needs.00:00 Introduction and Guest Welcome00:15 Understanding Commercial Real Estate Financing02:23 Evaluating a Real Property05:33 Deep Dive into Lease Structures13:37 Loan Analysis and Sizing28:06 Insurance Premiums and Commercial Real Estate Lending28:43 Recourse and Non-Recourse Loans29:43 Deposit Requirements and Prepayment Penalties31:58 Summary of Capital Sources34:21 Lender Criteria for Loan Qualification38:09 Understanding Comps in Commercial Real Estate40:18 Sources and Uses of Funds44:17 Closing Costs Breakdown48:13 Cap Rates and Cash on Cash Returns54:11 Conclusion and Contact Information