Crye-Leike Insights: FAQs with Commercial Real Estate | Facebook
Eric Fuhrman, President of Crye-Leike Commercial, shared a few frequently asked questions people have when it comes to commercial real estate.
Hi, my name is Eric. Furman with commercial headquartered in memphis tennessee. Today, I'd like to talk about some frequently asked questions that we receive in the commercial division, both from agents and buyers. Looking to either for agents to represent buyers or for buyers looking to buy a property to occupy for their business and the question is what are the lender requirements to buy a building For my business, what are lenders looking for from me and what are the options. Well today, we've got we've got jump right into that and help explain the options. The things that they're looking for and the options available to you as a buyer. First of all, you as a buyer, are the best suited borrower to the Bank and what I mean by that is they prefer you to occupy a building with your business. What's the alternative the alternative. Our investors that buy buildings up and they don't occupy them. Those are not really the most preferred for It's a lot of times because they like to see people invested in like to see that money and the ownership right. There in the building. So you're off to a great start. Um the before we jump into the what the requirements maybe we might have to take a step back and see which Bank which Bank should I look at and most commonly starts where I have a relationship. You may have a relationship with the Bank where you've been there for many, many years and many, many times that's where you wanna start asking those questions about feasibility of of making the Gorgeous beyond that, you may also find that certain things have certain appetites for the kind of property your looking for for example, Bank a may have a real preference for bar lending on apartments or multi family Bank me. May not lend on multi family at all and so are so consider starting where you have an existing relationship, but even more than that, ask your agent, your agent will be able to guide you as to which banks have an appetite for various types of commercial properties Okay so financing options, there are many products available to you as a borrower, as you as you get into your project. You might find that I need alone. I'm might need a line of credit and I might need this product. This product fit in this product and of course your lender will be able to advise you on which products they have available and which are best suited for you, but it's just great. I hope, helpful for you to know that it's not just one sweeping ideas It's just a loan, but there's, a lot of different products that banks have out there. That can handle a wide range of buyer needs it's a good idea to also make the distinction that there are standard Bank loans, just hey I need a loan and then there are sba loans sba loans are government guaranteed loans that have some different requirements than a typical Bank loan. They both are unique. They both have advantages and disadvantages and you're gonna want to know about both of them when you talk to your lender So what are the lender requirements and that's the reason why we're here today is to talk about what you might need to bring to the table to obtain your loan. First of all, they do wanna see lenders. Many times. You want to see a track record and by that, an established pattern of good business and that's gonna be demonstrated on your financials. Many times and so they will want to see those financials and want to see how many years of good business you can demonstrate alot of times three to five years is the minimum of both business financials and tax returns alot of times Small business that they will want to see personal financial statements from you as well. What that is is a document that outlines just in more less layman's terms and I wanna wear your your your capital is spread around your business and your personal financials. As well. Hence the personal financial statement, so collateral collateral is a fancy word for cash, usually cash down payment on your building and 20 percent is a good rule of thumb and so 20 percent down for a typical Bank, like Is what we're referring to those requirements can change for loans, but that's just a good rule of thumb is to kind of be thinking in the 20 percent range and then they also a lot of a lot of times. Banks love to see your deposit business come to the Bank where you have the loan so for example, if you have always banked at this Bank and you're getting your loan from this Bank, they may really preferred for you to bring that deposit business in other words, your checks and your savings accounts and things like that over to this other Bank, just keep that in mind. It's really uh a Cherry on the top of them, if they can get your deposit business and lastly, what about if ima church, for a nonprofit can I do this to these requirements apply to me and generally speaking, they do churches and nonprofits are unique in that they also have to demonstrate a good pattern and good track record of business history and so for some of these things like three to five years of financial statements be thinking along those lines. If that's something you will also have to bring to your lenders office and be able to demonstrate before you get your loan, I hope that helps and if we can Help to you, please let us know, thanks for watching