You Always Have More Options Than You Think (Commercial Real Estate Risks)

On a recent Inner Circle call, one of our members walked through a situation a lot of you will recognize. Two projects running at once. Cash tied up in buildings. A refinance that has to land before the next thing can start. And the very real fear of running out of money in the middle.

So I asked a question I ask a lot: worst case happens and the refinance doesn't come through. Where does the cash come from?

He gave me an answer. I asked what else. He gave me another. I asked what else again. By the time we were done he'd listed five or six real paths, and the fear had visibly drained out of the conversation.

Nothing about the deal changed. What changed was that he could see the options. That's the whole point of this article.

The Exercise, By the Numbers

1 Question

Worst case happens. Where does the cash come from?

5-7 Paths

What most operators find once they actually list them

0 Deals

How many you should start without doing this first

Why You Can’t See the Paths Until You’re Standing on One

Here's the thing I've noticed over and over, in my own deals and in other people's.

Before you're in a bind, you can only see one or two ways out. Once the pressure is actually on, you find seventeen. Not because new options appeared, but because urgency makes you look properly for the first time.

That gap is where most of the anxiety in this business lives. You're not scared because you're out of options. You're scared because you haven't counted them yet.

The fix is stupidly simple: do the counting before the pressure, not during. Sit down while things are calm and force yourself to name every path. What you'll usually find is that you have five or six ways through. Some of them are ugly. Some of them cost you money. None of them end the business.

And once you can see six paths, a deal that felt like a cliff turns back into a deal with some work in front of it.

The Exercise: Map Every Option Before You Need One

Run this on any deal where the financing has to line up in a particular order. It takes twenty minutes.

Step one. Name the specific failure. Not "what if it goes bad." Be precise. "The refinance on Building A doesn't close by March, so I can't pull the cash out to fund the renovation on Building B." One sentence, one failure.

Step two. List every source of cash you could reach. Every one, including the ones you'd hate. Write them down. Do not evaluate yet.

Step three. Keep asking what else until you run dry. This is the part people skip and it's where the value is. Your first two answers are the obvious ones. Answers four, five, and six are the ones that actually calm you down, and you only get there by refusing to stop at three.

Step four. Cost each one. What does it cost in dollars, in equity, in time, in relationship? Now you have a ranked list instead of a fog.

Step five. Pick your trigger date. The date you stop waiting on Plan A and execute Plan B. Put it on the calendar. Most operators drift past that date hoping, which is how a manageable problem turns into a real one.

The output isn't a document you'll ever show anybody. It's the thing that lets you sleep and keep moving on the deal in front of you. If you want to pressure-test the numbers behind each path, that's what proper underwriting is for, and you can model the scenarios in my Deal Analyzer for free.

Here's the menu most operators forget they're holding. Not all of these fit every deal, and several are genuinely unattractive. That's fine. The point is that they exist.

Borrow against something you already own free and clear. If you have an unencumbered building, that's a phone call and some paperwork. A lot of people treat a paid-off asset as untouchable and then panic about liquidity while sitting on it.

Private lending. More expensive than a bank and dramatically faster. For a six-month gap, the rate matters far less than the timing does.

Bring in an equity partner. If you've been doing good work publicly, you probably have people who have already told you they'd invest with you. Most operators forget those conversations happened. Giving up a slice of one deal beats losing the deal. Here's my walkthrough on how to raise capital for commercial properties.

Restructure the deal itself. Go back to the tenant you asked to vacate and offer an extension. Re-lease the space short term. Phase the renovation so half gets done now and half after the refinance. The plan on paper is not sacred.

Renegotiate with the seller or lender. Extend the closing. Ask for seller carry on a piece. Ask the lender for interest-only a while longer. The worst answer is no, and you'd be surprised how often it isn't. Creative structures are the whole subject of buying commercial real estate with no money down.

Sell something. An underperforming asset, a piece of land, the property that has quietly become a full-time job. Trimming the portfolio to fund the better opportunity is a strategy, not a defeat.

Or just execute the original plan. Sometimes the answer really is that Plan A is fine and you needed to see the backups to trust it.

If the layers of debt and equity underneath all this are fuzzy, read Capital Stack 101 and the menu will make a lot more sense.

A Problem and an Issue Are Not the Same Thing

One of our members said something on that call that I keep coming back to. He told the guy: you don't have a problem. You have some issues to work through.

That's not a semantic game. A problem is something without a solution. An issue is something with a solution you haven't executed yet.

Your worst case being "I have to borrow a couple hundred thousand against a building I own outright, and shuffle money around until things lease up" is not a problem. It's an issue with a known fix and a known cost.

Most of what feels catastrophic in the middle of a deal is an issue wearing a problem's clothes. The option-mapping exercise is how you tell them apart, and the difference matters, because you make bad decisions when you think you're cornered.

You Never Get Comfortable Juggling Until You’re Juggling

The other thing worth naming: a lot of this fear isn't really about the deal. It's about doing something for the first time.

Somebody on the call put it perfectly. You're never going to get comfortable managing two or three projects until you actually manage two or three projects. There's no version where you feel ready in advance.

It's like calculus in high school. You sit there furious that it makes no sense, and then it clicks, and a year later you can't remember why solving for x was hard. Going through it is the only path.

And the thing nobody tells you starting out: real estate never siloes neatly. Everyone wants to finish one project cleanly before starting the next. On paper that works. In reality the good opportunity shows up while you're mid-construction on something else, and if your rule is one at a time, you pass on it. Then you pass on the next one.

That's not caution. That's a ceiling you built yourself. If two projects at once feels like too much, that's usually the growth happening, not a signal to stop.

Turn the Plan Into Three to Five Daily Tasks

Once you've mapped your options, the anxiety has somewhere to go. Put it into the calendar.

If I've got four months to hit a deadline, I'm not sitting around wondering whether four months is enough. I'm asking what has to happen every single day to get there. How many calls do I need to make? How many times do I need to be down at the city checking on the permit? Which three or four things move the needle today?

Three to five things a day. No more than five. Any more and you've written a wish list instead of a plan. Block them, knock them out, and you're done. The deadline stops being a thing you dread and becomes a thing you're chipping at.

Do the hardest one first. Whatever you're quietly avoiding when you wake up is almost always the thing that actually matters, and it will sit on your chest all day if you let it.

This is also the honest answer to "how do I juggle two projects." You don't juggle projects. You execute a short list every day, and the projects move.

Key Takeaways

You are rarely out of options. You just haven’t counted them. Before the pressure hits you can see one or two paths. Under pressure you find seven. Do the counting early.

Name the specific failure, not a vague fear. “The refinance does not close by March” is workable. “What if it goes bad” is not.

Keep asking what else until you run dry. Your first two answers are obvious. Answers four through six are the ones that let you sleep.

Cost every option and set a trigger date. Know what each path costs and know the exact day you stop waiting on Plan A.

A problem has no solution. An issue has one you have not executed yet. Most deal panic is an issue wearing a problem’s clothes, and you make bad decisions when you think you are cornered.

Deals never silo neatly. If your rule is one project at a time, you will pass on the good opportunity that shows up mid-construction. That is a ceiling you built.

Convert the plan into three to five daily tasks. Hardest one first. You do not juggle projects, you execute a short list and the projects move.

This article came out of a recent Inner Circle mastermind call, where our members work on their businesses instead of in them. Nothing here is attributed to any member. If you want a room of operators pressure-testing your deals, take a look at the CRE Accelerator.

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