Systems to Manage Commercial Real Estate Debt

“Excel isn’t a database…” No sheet Sherlock, Excel is a spreadsheet. Albeit a very smart spreadsheet with many capabilities, switching to a system can mean that all of your information is available, current, and accurate all the time. Commercial real estate professionals have been using Excel to manage their debt since forever. But maybe it’s time to switch to a systematic approach… Let some automation take the wheel. 

No System, No Problem

When using spreadsheets, you risk relying on outdated or inaccurate data that can lead to failures in compliance or bad decision-making. Market data is always changing and you need to be able to understand your loans in the context of current market conditions to make the best debt decisions. 

To keep data fresh in Excel, there is a continuous need for maintenance that is time and labor intensive. Managing Excel should serve as the preliminary stage of your primary workflow, yet it makes up the bulk of it. 

Manually inputting data is not only error prone but decrease overall productivity — too much of your time is spent finding docs, crunching numbers, inputting and updating data, etc. all to run a calculation.

We once had a broker ask us to double check their client's yield maintenance calculation for a loan they originated a while back because there was a large difference between the estimate they received and the one we calculated. At first, we assumed it was a function of rates changing, but eventually found that nearly the entire difference was due to an error in the "Amortization Months" field of the online calculator. The calculator was right, but the user was wrong and therefore, the outcome was wrong by over $600k. 

Check out the full story here!

My Current “Systems” Aren’t Broken

Can your current system alert you when there is a refi opportunity on one of your properties? Can it instantly give you a prepay number? We know Excel can’t, but LoanBoss can.

Centralizing your information into a single, institutionalized system grants you (and your team) 24/7 instant access to live, actionable data, making strategic decision-making easier and prevents misinformation.

After all, what good is a refi cash out number from your last update three months ago if you're thinking of refinancing now?

For one firm, misinformation and lack of accessibility lead to a mistake that cost millions. They were accessing a sale for one of their properties and had an analyst run a defeasance penalty. But the analyst made assumptions about the defeasance provisions based on his notes because he didn’t have access to the actual docs. The team prepared for the sale but it fell through due to an overly underestimated defeasance, and the deal ended up going into litigation. 

Read more on this high cost oversight here. 

Rather than digging through multiple spreadsheets, a system can house all your critical information in one place and update it — you no longer have to update cash flows, loan modifications (refis, draws, paydowns), changes in loan terms, etc. to get actionable data — enter everything once and it will take care of the rest. 

The initial lift to switch to a new system is hefty. We know. But once it’s done, it’s done. 

Do you have a system in place to manage your debt?

Let's continue the conversation, email us at theboss@loanboss.com

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