Commercial Loans Question

[Alexa Martinelli]

Hey all,

I'm currently reading a book called "Commercial Mortgages 101" by Michael Reinhard. I was just reading a section about what the buyer's net worth should be to qualify for a commercial mortgage. 

From my understanding, the book is saying the buyer should have at least 50% worth of the loan amount in their net worth to qualify for the loan.

So is that to say:

If you were going to buy a multiplex worth $800k, and you were placing $200k down for a $600k commercial loan, would they require you to still have at least $300k in cash (50% of the loan amount) laying around to get that loan?

-a newbie still learning

[Adam Johnson]

I wouldn't live by that rule of thumb.  Commercial mortgages tend to be more deal-based than personal-based, but unless you are looking at a very large deal and have already done quite a few of them, they will consider your personal finances and credit score to some degree.

There are lots of ways to put together a deal creatively with less money down, but again, they would be deal-based on a case by case basis.

Keep reading, you will certainly learn something!  When you are done with that, read something else.  The more you learn, the better equipped you will be to close a deal when it comes your way.