When initially speaking with your potential borrower on a commercial mortgage deal, the first goal should be to determine if you feel that the property and the scenario presented are viable for funding.  As discussed in previous blogs, there are only so many hours in the day, and none should be wasted on deals that do not have a chance of getting funded.  For my firm as a lender, these include calls to get a $200 MM project funded in Costa Rica, or a NASCAR track in upstate New York.  This also includes deals for a $800 K mixed-use where the NOI  just does not work for the loan scenario desired and the borrower is not realistic.

For different reasons, these scenarios present an extremely low probability of final funding, which is the ultimate goal of lender, borrower and mortgage broker.  Home run funding scenarios do come along, but for the most part it is about hitting singles and some doubles.  That said, what information am I going to need to see, and what questions will I need answered.  For the most part, the initial information will be an accurate income and expense on the building to be funded, a 1003 and a credit report on the borrower.  There are other questions that need answering as well.  This Deal Description Form will lay most of them out.  As always, let us know if there are any questions.

Mike

DEAL DESCRIPTION FORM

- Property Type (Mixed-use, multifamily, office, retail, warehouse, etc.):

- Property description (i.e., # units)?

- Purchase or Refinance:

- Cost of the building:

- Amount of loan desired:

- Owner occupied property or investment only?

- Full document or stated application?

- Credit score been obtained?

- 2 years tax returns available?

- Contract of sale available?

- Personal financial statement available?

- Survey available?

- Recent appraisal available (new appraisal will be required)?

- Property leases available

- Borrower 1003 completed?

- Building leases available?

- Year leases expire?

Gross Yearly Rents for the building?

Building expenses:

•-         Property taxes (per year)?

•-         Building insurance (per year)?

•-         Utilities (state per month or yearly total)?

Do the tenants pick up any percentage of building expenses?

Note - 10% will typically be deducted from the gross rents to account for vacancy and building management.

Commercial Capital Alliance

131 Jericho Turnpike, Suite 202

Jericho, New York  11753

516.741.8880  haltman@easycommercial.com  http://www.easycommercial.com/