Real Estate PE
Prepalyst has 20 real estate debt interview questions with model answers, covering ltv, dscr, debt yield and structuring against a property's cash flow. Every question is graded on technical accuracy, completeness and interview communication. Practice is free.
A junior underwriting calculation that tests whether you include every required debt payment.
A multifamily property produces $3.0m of underwritten NOI. Its loan requires $1.8m of annual interest and $0.4m of scheduled principal amortisation. Calculate DSCR. If the minimum is 1.35x, does it pass?
Tests cash-flow coverage fluency in real estate debt interviews.
What is DSCR, and how does a rising interest rate affect a floating-rate borrower's DSCR?
A first-round question on real estate loan structure and sponsor alignment.
What is the difference between recourse and non-recourse real estate debt?
A foundational underwriting question for real estate lending roles.
Define loan-to-value. A lender makes a $60m loan against a $100m property. What is the LTV, and what does it miss?
A basic real estate credit metric that lenders use alongside LTV.
Define debt yield. A property has $8m of NOI and a $100m loan. What is debt yield and why do lenders care?
A common loan-documentation question for transitional real estate lenders.
Why might a lender require a floating-rate borrower to buy an interest-rate cap?
A first-round real estate credit question on what protects a senior lender.
Explain why senior mortgage debt ranks ahead of mezzanine debt and equity. What does that priority mean in a downside?
A maturity-risk case central to bridge and transitional lending.
A bridge loan matures in two years. How do you assess whether it can be refinanced?
Tests whether candidates know how lenders protect a loan after closing.
What covenants would you include in a transitional real estate loan, and why?
A practical asset-management question for construction and development lenders.
How does a construction lender protect itself after closing?
Real estate debt and acquisitions interviews both test the three sizing constraints.
A property has $8m NOI and a $160m value. A lender offers 65% LTV, requires a 1.35x DSCR and a 9% debt yield. Interest is 5.5% interest-only. How much debt do they actually lend?
Tests property-type judgement because hotel cash flow differs sharply from leased real estate.
What changes when you underwrite a hotel loan rather than a loan on a leased office building?
A lender judgement question that goes beyond property-level metrics.
What do you assess when underwriting a real estate sponsor?
A portfolio-management scenario for a lender monitoring a transitional office loan.
A floating-rate office loan has a 1.24x trailing DSCR against a 1.25x springing cash-management trigger. The borrower has made every payment, but a tenant representing 18% of rent expires in six months. What do you…
Real estate debt and securitised products desks both test this.
Explain how a CMBS deal is structured. Who bears the first loss, and what is the special servicer?
A senior real estate credit case on exercising lender remedies.
A borrower cannot refinance at maturity. How would you decide whether to modify the loan, extend it or enforce?
A workout judgement case for real estate debt asset-management teams.
What would make you transfer a real estate loan to watchlist, and what happens next?
The gap-funding layer that appears in most levered real estate deals.
A sponsor needs 75% total leverage but the senior lender will only go to 60%. How do you fill the gap, and how is your position secured?
A real-estate-debt scenario lab testing debt yield, stressed DSCR and refinance sizing under a rising-rate maturity wall.
A floating-rate multifamily loan matures next year. Calculate the lender's current income protection, stress the debt service, and quantify the refinance gap before recommending a modification or capital solution.
A real estate debt investment-committee case on whether time creates recovery value or merely delays loss.
A $90m bridge loan matures today. A consensual 12-month extension requires a $5m sponsor paydown and is expected to produce $92m of net recovery next year. Immediate enforcement is expected to produce $82m net in six…
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Firm names indicate where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with the firms named.