Episode Overview

In this episode of the Ironclad Underwriting Podcast, host Jason Williams welcomes returning guest Frank Patalano for a deep dive into the current challenges facing commercial real estate investors. From refinancing hurdles and cap rate expansion to rising insurance costs and shifting debt service coverage requirements, Jason and Frank break down how today’s unpredictable market is impacting deals, underwriting strategies, and investor expectations. They share real-world examples, lessons learned, and practical advice on navigating this volatile landscape while keeping long-term goals in sight.

Topics Covered

• Cap rate expansion and its impact on property values
• Refinancing challenges and the rise of cash-in refinances
• Interest rate hikes and their ripple effect on underwriting
• Insurance and tax increases altering projections
• Debt service coverage ratios and lender requirements
• Balancing conservative vs. aggressive underwriting in today’s market

Key Quotes

• "Underwriting is not perfect; you have to go with your best assumptions, but even markets are screwing everybody over."
• "There are many people in much worse shape because they were not figuring in cap rate expansion, and that’s why some are just turning in keys."
• "Real estate is not a short-term game. If you can weather this storm, you will probably find light afterward."

🎧 Connect with Jason:

✅ LinkedIn

✅ https://IroncladUnderwriting.com

✅Linktree

🎧 Connect with Frank:

✅LinkedIn

📌 Episode Overview:

In this episode of The Ironclad Underwriting Podcast, host Jason Williams and recurring guest Frank Patalano take a deep dive into one of the most misunderstood aspects of commercial real estate: the capital stack and waterfall structures. From senior debt to common equity, they unpack how each layer of financing works, who gets paid first, and where the risks and rewards lie. Whether you’re a new investor or a seasoned operator, this episode will give you clarity on structuring deals that stand the test of time.

🗂 Topics Covered:

• The fundamentals of the capital stack: debt, equity, and everything in between
• Why senior debt is the safest investment and how secondary/mezzanine debt works
• Understanding preferred equity vs. common equity and their risk profiles
• The mechanics of waterfall structures: preferred returns, splits, and IRR hurdles
• Why keeping structures simple is often the smartest move for syndicators and GPs

💬 Notable Quotes:

• “Remember, the very first rung gets paid first with the lowest risk, and common equity is last with the highest risk, but also the highest potential reward.”
• “A confused mind says no. If you overcomplicate your waterfall with dozens of hurdles and classes, investors won’t sign up.”
• “Debt is fixed. Equity shares in the upside. That’s the tradeoff: security versus potential.”

🎧 Connect with Jason:

✅ LinkedIn

✅ https://IroncladUnderwriting.com

✅Linktree

🎧 Connect with Frank:

✅LinkedIn

Episode Overview

In this episode of the Ironclad Underwriting Podcast, Jason Williams and Frank Patalano dive into one of the most common struggles new investors face: choosing a market. They share why focusing on a single market early on can help you gain an edge, how to spot pitfalls in neighborhoods, and the importance of truly knowing the area beyond just the numbers. With real-world stories, market analysis tips, and lessons learned from decades of experience, this conversation will help you avoid spreading yourself too thin and build a stronger foundation for long-term success.

📌 Topics Covered

• The importance of starting with one market and mastering it before expanding
• Why boots on the ground and local partnerships are critical for investors
• Market analysis tools, comps, and the role of neighborhood insights
• Risks of over-diversification and benefits of concentrating investments
• Real-world examples of deals that fell through due to local competition
• How neighborhood quality impacts asset class upgrades and rent growth potential

💡Quotes from the Episode

• "You need to know where your tenants are going to go for pizza on a Friday night."
• "I’d rather own the worst house in a nice neighborhood than the nicest house in the worst neighborhood."
• "When you’re starting out, stick with one market—even if it’s not perfect—because you know it best."

🎧 Connect with Jason:

✅ LinkedIn

✅ https://IroncladUnderwriting.com

✅Linktree

🎧 Connect with Frank:

✅LinkedIn