Board Topic: Commercial Loan 7 units (bad credit) any chance?
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Commercial Loan

Posted by: Ed Sep 7 2004, 09:17 AM

I just purchased a 3 Family unit with not so good credit...I now would like to purchase a 7 unit building fully rented...249,900 , $5000 month in rents...I have 20-25% to put down but need to get a commercial loan.

Do you think I have a chance to get a commercial loan with bad credit (610)?

Thank you so much for your help....Ed

Posted by: loanuniverse Sep 7 2004, 10:48 AM

As long as your Net Operating Income {NOI} supports the proposed debt, the building appraises high enough so that the bank can still count on that 20% to 25% equity, and you don’t have a bankruptcy, I don’t see why not.

A 610 credit score is what some people call “marginal”, but in commercial lending reliance on the guarantors is at best a secondary source of repayment. It is all about cash flow.

If I had to list things in order of importance for income producing property loans, my list would be like this:

1 – Debt Service Coverage.

2 – Loan-to-value

3 – Tenant Quality

4 – Guarantor

Good luck

Posted by: Ed Sep 7 2004, 03:41 PM
Thank You So Much!

Posted by: Commercial Lender Sep 10 2004, 01:12 PM
w/610 ur lookin at a 60-65% LTV on a stated income loan. If you would like to go full doc (i.e be able to provide personal tax returns, rent rolls etc) you will may be able to go as high as 70-75 LTV. Leme know if you have any questions.

Posted by: honzie Sep 12 2004, 05:29 PM

I can help you as well. I work with a company that does commercial loans, hard money loans, equipment leasing, equipment sale leaseback, etc. We do the deals that the banks can't. You probably already know that banks are harder to deal with because of the guidelines they have to follow. That is where I come in. Let me know if I can help.

Thanks! Tim

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