Getting Prepared for a Successful Commercial Real Estate Application

If you are preparing for a commercial real estate application, you should really have a few things in order before you’ll have a reasonable expectation of being approved. Here are some of the most important aspects of preparation for your commercial real estate application.

Net Worth

One of the first things any lender will look at when you apply for commercial real estate loan is your net worth. This amounts to the difference between your liabilities and your assets, and a lender will be looking to see what your net worth is at least equal to the amount of money you want to borrow.

Credit Score

While your credit score is not as important on a commercial real estate application as it would be for a residential loan, you don’t want to have a disastrous credit score when applying for any loan. If your credit score is excessively low, you can count on any lender questioning you about it. You can certainly qualify for a commercial real estate loan with a credit score below 700, but if it’s below 500, you’ll have a very difficult time being approved.

Income

When applying for a commercial real estate loan, a lender will be very interested in knowing whether you’re self-employed, or whether you work for someone else. If you already own a number of properties, the lender will want to know what your cash flow situation is. Lenders are also looking to ensure that when you do own several properties, if one of them is having a difficult time, the other properties should be able to prop it up, at least temporarily.

Management and Ownership Experience

If you do own other real estate properties, a lender will be interested in knowing what your level of management and ownership experience is. For instance, if you have previously managed and owned a multi-family dwelling or an apartment complex, that would carry more weight than simply owning a single-family building. A lender will also want to know your level experience with performing credit checks, running background checks, verifying employment, and all about rentals and leases.

Preparing for your next real estate transaction? 

If you need funding to execute your next real estate investment, we may be able to provide financial assistance. Call us at Fintrus, so we can explore some alternatives for providing you with the funding you need.

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