Hi all - I am in the process of applying for my first commercial loan for a property that was a bed and breakfast but I will be turning into a short-term rental (Airbnb/VRBO). After reviewing my application information, my loan officer said things look good but wants to visit the property to see the layout of the building and how I will rent it (it divides into a couple of different units). This will be an hour and a half drive each way for her, and when I asked what questions or concerns the viewing is going to address, she said she just wants to see it.

For those of you who have been through this process before, do you have a sense of what she is trying to get at? Is this really an interview of my potential as an Airbnb owner/operator (I don't have prior experience)? I don't mind showing her the building at all, but I feel like there is something I'm missing and would love your input so I can be prepared.

Thank you!

I have applied for several commercial loans before for both apartment and retail properties. For my latest commercial loan, the representative processing the loan actually flew in from another state to visit the subject property. I don't think his visit was a comprehensive site inspection (the lender separately ordered other companies to do a phase I, a property condition assessment, and an appraisal)--more likely it was part of their standard due diligence process for the lender's representative to lay eyes on the property before they lend on it. I never got any feedback from the representative (well, aside from an approved loan!) but probably he wanted to verify that the building was fully occupied with the stated tenants and that it was in good condition.

As far as vetting you as an operator goes: my commercial mortgage broker has a tailored version of my resume on file--it outlines my other work experience like a standard resume but also details my portfolio of past rental properties. I believe this resume is part of every loan package he submits on my behalf, and I've never been asked to provide any additional "proof" that I can operate a retail property. It sounds like what you're proposing is more hands on than operating a retail property (which in any case is done by a property management company), so you are probably correct in thinking that your loan officer is doing an on-site interview with you at the subject property. I'm sure you already have a business plan and a good idea of how you're going to operate the property as an Airbnb, so you'll just have to be prepared to speak to that as you're walking the building with the loan officer.

Hope that helps!

Tom Wong

@Kristin Zajac a site visit is very common with a commercial loan.  Getting some "Face Time" with your lender should be a good thing.  Remember, at every level, real estate is a relationship business, so the better your relationships, the better your business.

All the Best!

Wren