Commercial Real Estate Financing Question

[Tina T.]

Sorry if this question has been asked or if it seem silly, but I read on the commercial real estate lending requirements and it seems lenders look at the investment return of the property itself to decide if they will lend or not. So if I have 750 credit score, will they lend me unlimited amount of money regardless of my income? Say, if somehow I found a multi family property with 300 units by the beach, they will lend me millions of dollars to buy it as long as the property itself generates satisfactory returns? 

[Alexander Felice]

We lend based on both

if it's your first commercial loan, you'll most likely have to personal guarantee it, so your score will matter.

There is more that U/W looks at than JUST solvency, though if you're properly collateralized and you have positive DCR then those are certainly the two biggest factors that will be considered. Also the bank is going to look at whether or not they think you can close and run the unit properly.

If you find a 300 unit multi by the beach, they will probably lend you 75% of it assuming your personal guarantee is good, and it will cash flow high enough to hit ~1-1.2 DSCR