Solutions for Net Worth Requirement on Commercial Financing

[Jason V.]

One of the things I keep hearing regarding commercial loans is that lenders typically want your (the borrower) to have a net worth that exceeds the amount of the loan. Is this something that investors are getting a pass on for their first larger MF property? Or are they working around it in other ways?

If I were to "partner" with a higher net worth individual, who's only contribution would be bringing their net worth and signature to a deal, does that fly? If I'm not borrowing from them, or relying on them for anything else, what would be fair compensation? 

Thanks all!

[Derek Carroll]

Jason V. It also depends on size of the deal and lender. On smaller projects with a local community bank or credit union you can get away with less as long as you can show reserves after down payment of 6-9 months of debt service.