Property has good paying tenant. How easy it to obtain a $1.2M commercial property with 20% down?

Asked by Sahib Hassan, Roseville, CA Sat Apr 14, 2012

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Teri Andrews…, Agent, Auburn, CA
Sun Apr 15, 2012
Commercial property financing is very different from residential. The lender will evaluate the type of building and business ( is it industrial, retail, medical, that sort of thing) how old is the building, they will also look at your finances, the length & terms of the current leases.

Your best bet is to sit down with a commerical lender and find out how they evaluate a property & a borrower for loan purposes.
0 votes
Michael Smith…, , Roseville, CA
Sun Apr 15, 2012
Sounds like SBA all over it!
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Jim Walker, Agent, Carmichael, CA
Sat Apr 14, 2012
Not as easy as picking up a manhole cover with your pinkie.*

The type of property is important to commercial lenders.

Is it a special purpose property? That is suitable only for the current tenant or one in the exact same business, or is it flexible office or retail space, that could be desirable to a wide number of tenants?

The lender is going to look at your commercial areas vacancy rates, comparable lease rates.

Another issue is the size of your loan, $960,000 is jumbo for residential, but is considered small potato for a commercial loan.

For a maximum LTV loan, which in todays environment, an 80% loan is pretty much a max LTV for an investor. You will have to have great DSC. If I were still a mortgage broker I would not want to be shopping your loan if it was less than 1.3 to 1.

If you were owner/ user getting a SBA loan, you might go higher than 80%

*I just brokered a commercial sale with 101% financing, so .... easy no......possible yes.
0 votes
Michele Pete…, Agent, Rocklin, CA
Sat Apr 14, 2012
There are several great commercial lenders in the area.
Are you working with one already?

Many factors go into financing commercial property.

Call Jeff Compton - Owner of Comstock Mortgage.
Direct: (916) 367-7135
He will walk you through the steps, best financing options based on type of property, rent received, condition, and state of property. Jeff is local and somebody you can meet in person and discuss business face to face. Very professional and works hard for his clients.

Give him a call...Always best to have a local resource who knows and understands the local market.

Good luck to you!

Michele Peterson
Keller Williams Realty
(916) 743-5934
CA DRE 01872795
0 votes
Michele, I totally love the fact that you recommended Jeff. Good dude and quality lender! Albeit not as good as me on the residential side, he does represent on the commercial side! Nice post. Way to go!
Flag Sun Apr 15, 2012
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