Commercial Mortgage : Let’s get Personal

While many loans are non-recourse that don’t require personal guarantees, lenders need to know exactly who they’re working with so it’s up to you to provide not only your personal financial strength as a Borrower, but equally important is to highlight your experience as an investor/operator of income-producing assets. Current net worth statements along with resumes/bio’s demonstrating track record are all important to have readily available to keep the process moving forward. Lenders will ask and verify through background checks and credit scores that you are credit-worthy to borrow the necessary funds when purchasing or refinancing your properties. Its important to be upfront with any past issues in order to establish trust and credibility with your new lender and will avoid having to explain why these issues weren’t disclosed early in the process.

What’s Your Experience

Illustrating track record and experience is more critical than ever, as lenders want to know they’re dealing with seasoned operators who know how to manage assets. In the case where this is your first such acquisition, it will be critical to add a “deep bench” to your team, whether in-house or 3rd party, in order to demonstrate competency to your skill set and management team. First time operators/investors will have a tough time convincing today’s lenders that they are reliable and credible in not only modeling operating performance but also in running the day-to-day aspects of owning commercial real estate. At the end of the day, lenders don’t want to foreclose on the property and find themselves in a position whereby they are forced to asset manage their collateral. They’re in the business of lending not operating, so it’s vital that you
can demonstrate conservative projections that line up with well-known operating metrics of each asset class.