I'M YOUR COMMERCIAL MORTGAGE GUY.
I am your Commercial Mortgage Guy. My background, pre-TMG, is in major commercial construction and real estate development. I didn’t know how to do a house until I had to do mine and now, I use the residential sector as a fill-in.
Commercial Mortgage Process
The commercial mortgage process is very different from the residential process. Residential mortgagees concentrate on the qualifying of the individual borrowers, through GDS and TSD. True commercial lenders depend much more on qualifying the building, through debt coverage.
Residential lenders doing commercial financing are not the same.
There are some residential lenders, who offer to finance multi-res commercial products, but most limit themselves to the number of doors or the number of buildings and all qualify the borrower through BFS or provable income and given ratios. On the other hand with most commercial lenders, someone with a very low provable income and a profitable building could receive financing
Commercial lenders differ among themselves. Some insist on Filogix and some do not. Some have a substantial minimum and others do not. Some insist on insurance while others never use it. All of them will insist on an appraisal, which they won’t use and, instead, use their own formula. Some are TMG partners and most are not. Some will include a brokerage fee and most will not.
Banks favour their existing clients
The Banks do have commercial lending departments. I know little about them, because they don’t want to deal with me and I would prefer not to deal with them. For the most part, they prefer commercial mortgages with their existing clients.
If you must consult, ask an expert in the field.
Recently, I saw an online discussion among what I believed to be residentially-focused mortgage agents, discussing the best way to finance a multi-residential substantial apartment, using residential lenders. It seemed somewhat akin to forcing a round peg into a square hole
If you wanted to learn to fly, you would ask advice from a pilot, not from an airplane mechanic. To learn about a commercial deal, ask a commercial mortgage agent.
If you need advice on commercial financing, call me anytime 866-435-3748
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