Minnesota Commercial Mortgage Loans - Joe Metzler Mortgage Group

Financing Commercial Vs Residential Properties

In commercial real estate financing, the focus of a lender's attention is initially on the property and then on the borrower.
In residential financing, it is initially on the borrower, then the property.

This is not to say that the buyer or owner of a commercial property in search of financing can have no assets, income, or credit! What it means is that the lender will look first to the property's ability to support itself in its market and then to the borrowers financial strength.

Some of the key issues a lender considers in commercial finance are:

The condition of the property.
The quality of the leases (tenant strength, term, renewals, escalators, etc.).
The quality of the tenants.
The current occupancy and its history.
The quality of the local market and its trends.
The cap rate (Net Operating Income divided by Value or Price) compared to recent sales.
The management experience and financial strength of the borrowers.

Depending upon the type of property financed and the lender chosen, you may or may not be able to use secondary financing in the purchase of a property. Typically, lenders want a minimum of 15% of the purchase price in cash (which is the case with multifamily properties), although many look for more (the case for retail, office, and industrial).

This site contains several sections with additional information on commercial financing, specific issue for various types of properties, and other topics. Please take some time to familiarize yourself with these sections. If you have a pending deal, though ... don't waste any time. Let's us get started today!

As a Lenders One partner, we are the 9th Largest Retail Mortgage Originators in the country. We were recently rated the 8th largest lender in Minnesota. Any use or duplication of any materials is strictly prohibited. www.JoeMetzler.com, www.TwinCityHomeLoans.com, www.MnHomesAndLoans.com

Mortgages Unlimited, Inc - Minnesota

The Metzler Group at Mortgages Unlimited 971 Sibley Memorial Hwy Suite 300 Saint Paul, MN 55118
Phone: 651.552.3681 Toll Free Phone: 800.638.0210 - Ext 681