Mortgage question on mixed-used property

7 Replies

In the process of selling a property that is a 6 units mixed-used building.  5 residential units & 1 commercial space. 

1 of the unit is zoned commercial with outsourcing dry cleaners. Is it necessary that the banks are asking for floor plans of the space? I've given them the jacket of the property with all permits/leases/info of property history. 

First time being involved with commercial sale.

The lender can ask for whatever they want - in the end, they are the investor, and if they're going to loan on the property they will have to be comfortable with the investment.  

The existence of a dry cleaner business on the property will likely throw up a red flag.  You should be able to get it through, but the lender will probably require some environmental "stuff" because of the cleaners.

@Blair Poelman Thanks for the insights. I did provide them all information. I just thought the floor-plans of space was a bit odd. I did provide them all PNL of property and necessary documents. 

There shouldn't be any environmental flags as its only a pick-up/drop-off dry cleaners. Thankfully it is an outsourcing business. Hopefully, all goes well with the loan. 

@Suzanne Emily Nguyen I will 2nd @Blair Poelman 's comment.  Most commercial lenders I work with will ask for floor plans, as well as "Phase 1" documentation (environmental studies, etc.) Especially with a dry cleaner tenant.

Originally posted by @Suzanne Emily Nguyen :

In the process of selling a property that is a 6 units mixed-used building.  5 residential units & 1 commercial space. 

1 of the unit is zoned commercial with outsourcing dry cleaners. Is it necessary that the banks are asking for floor plans of the space? I've given them the jacket of the property with all permits/leases/info of property history. 

First time being involved with commercial sale.

 Hey Suzanne

The reason for the floor plan could be to determine square footage percentage of residential units vs commercial space.  

I would not tell the lenders it has a dry cleaners on site if they only do laundry pick up and drop off.  It's a retail space.  Dry cleaning evokes thoughts of haz mat teams to lenders.

Stephanie

@Suzanne Emily Nguyen

I'm surprised they have not asked for an estoppel of the leases also.  @Blair Poelman mentioned that the dry cleaner business might throw up a red flag.  If it is truly outsourced and no dry cleaning is done on premises, this should not be a problem.

Gino

@Stephanie Potter @Gino Barbaro heyy guys thanks for the insights! Yes we’ve provided all leases as well. It shouldn’t be any issues I hope no laundry or dry cleaners done on premises just strictly pick-up/drop off services everything is outsourced. 

Congratulations! Assuming you have a LLC and this will boost your business credit.

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