commercial lender question
Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
commercial lender question
7 Replies
- 3yDevin PetersonBusiness MemberLender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votesWhich bank is this? Environmental tests are an industry standard generally in the commercial space
ProAlpha Capital56 Reviews - Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Its a local bank in boston not too large. Okay so any perm loan lender would require a 21e?
- Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes3y
Quote from @Rich Hupper:
I have two properties, one a commercial building for auto repair, the other is a mixed use building, commercial retail on the bottom floor and 2 residential units above ( this building is currently out of service needs full reno). Both properties mortgage free
I approached a bank for a line of credit on the auto repair building and a construction loan for the mixed use building.
The bank told me their desktop underwriting flagged my mixed use building as a hazardous space but not the auto repair building. So now the bank is requiring me to do a 21e on the mixed use building but not the auto repair building.
This is beyond me because I would think the auto repair business is more of an issue environmentally. However they are telling me because there was a dry cleaner business at the mixed use building in the past there could be soil contamination.
With that, I am considering not getting the construction loan and putting the building back in service with private money. Then approaching perm loan lenders after completion. Will perm loan lenders look for a 21e?
Hello Rich,
So it turns out the 21e is a state required lender. So I'm guessing most lenders will require this. Check with every other lender if state law requires it from for per the loan product. Thanks
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Quote from @Dennis Muno:
Quote from @Rich Hupper:
I have two properties, one a commercial building for auto repair, the other is a mixed use building, commercial retail on the bottom floor and 2 residential units above ( this building is currently out of service needs full reno). Both properties mortgage free
I approached a bank for a line of credit on the auto repair building and a construction loan for the mixed use building.
The bank told me their desktop underwriting flagged my mixed use building as a hazardous space but not the auto repair building. So now the bank is requiring me to do a 21e on the mixed use building but not the auto repair building.
This is beyond me because I would think the auto repair business is more of an issue environmentally. However they are telling me because there was a dry cleaner business at the mixed use building in the past there could be soil contamination.
With that, I am considering not getting the construction loan and putting the building back in service with private money. Then approaching perm loan lenders after completion. Will perm loan lenders look for a 21e?
Hello Rich,
So it turns out the 21e is a state required lender. So I'm guessing most lenders will require this. Check with every other lender if state law requires it from for per the loan product. Thanks
Even when its back in service and cash flowing?
- Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes3y
Quote from @Rich Hupper:
Quote from @Dennis Muno:
Quote from @Rich Hupper:
I have two properties, one a commercial building for auto repair, the other is a mixed use building, commercial retail on the bottom floor and 2 residential units above ( this building is currently out of service needs full reno). Both properties mortgage free
I approached a bank for a line of credit on the auto repair building and a construction loan for the mixed use building.
The bank told me their desktop underwriting flagged my mixed use building as a hazardous space but not the auto repair building. So now the bank is requiring me to do a 21e on the mixed use building but not the auto repair building.
This is beyond me because I would think the auto repair business is more of an issue environmentally. However they are telling me because there was a dry cleaner business at the mixed use building in the past there could be soil contamination.
With that, I am considering not getting the construction loan and putting the building back in service with private money. Then approaching perm loan lenders after completion. Will perm loan lenders look for a 21e?
Hello Rich,
So it turns out the 21e is a state required lender. So I'm guessing most lenders will require this. Check with every other lender if state law requires it from for per the loan product. Thanks
Even when its back in service and cash flowing?
I'm sure you'll have to find out with every lender you talk to. The 21e requested from you seems to come from a MA state law
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Quote from @Dennis Muno:
Quote from @Rich Hupper:
Quote from @Dennis Muno:
Quote from @Rich Hupper:
I have two properties, one a commercial building for auto repair, the other is a mixed use building, commercial retail on the bottom floor and 2 residential units above ( this building is currently out of service needs full reno). Both properties mortgage free
I approached a bank for a line of credit on the auto repair building and a construction loan for the mixed use building.
The bank told me their desktop underwriting flagged my mixed use building as a hazardous space but not the auto repair building. So now the bank is requiring me to do a 21e on the mixed use building but not the auto repair building.
This is beyond me because I would think the auto repair business is more of an issue environmentally. However they are telling me because there was a dry cleaner business at the mixed use building in the past there could be soil contamination.
With that, I am considering not getting the construction loan and putting the building back in service with private money. Then approaching perm loan lenders after completion. Will perm loan lenders look for a 21e?
Hello Rich,
So it turns out the 21e is a state required lender. So I'm guessing most lenders will require this. Check with every other lender if state law requires it from for per the loan product. Thanks
Even when its back in service and cash flowing?
I'm sure you'll have to find out with every lender you talk to. The 21e requested from you seems to come from a MA state law
Do you originate any loans for commercial property that requires this 21e environmental study?
- 3yLien VuongBusiness MemberReal Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
Almost all lenders (private or regular) will require a 21E as the likelihood of your property having some sort of contamination with the laundry service is very high and the remediation cost can blow up the asset. They're just about risk management.
The Elle Group5154 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.