Pre-approval obstacle with commercial loan

[Max Gomeniouk]

Hi all,

Wanted to see if anyone run into this issue and can offer advice. I'm working with commercial lender for financing and put in my first offer on a fix/flip property. Offer had financial contingency and our agent outlined the terms of our loan (6 month interest only note at prime +1%). upon sending the offer seller's agent requested that we provide a pre-approval which my commercial lender will not do until underwriting is complete. To start underwriting we need accepted offer...anyone dealt with using commercial loans when purchasing homes off MLS?

If any additional details are needed please let me know.

P.s. For this particular deal I got a personal pre-approval just to get things moving. I don't want to go this route in the future to avoid burning my credit score.

Max

[Ketan Patel]

Try another lender, typically a lender should be able to pre-approve you based on your credit profile and deal numbers. I have done that many times without any problem. 

[Andrew Johnson]

@Max Gomeniouk I'm in the same boat as @Ketan Patel in that the lender I've used typically does it based on something like a pro-forma as well as personal financial information.  Regional and local banks might have you fill out a PFS and look at things like net worth, other obligations, etc.  Even if you have a "great property" if it's a $5MM deal and you make $50K a year with zero net worth they will probably balk.  I could be wrong, just my guess, other (actual) lenders here on the forums might be able to provide greater insight.  That said, pre-approval vs. pre-qualified might come into play here.  Either way, a seller of a commercial property (or their agent) is going to know that a lender isn't going to give carte blanche to a borrower without underwriting, an appraisal, etc.  So I'd either ask for clarification on what the seller is looking for or find a different lender.

[Max Gomeniouk]

Thanks all. I've provided my financial statements to the lender so they do have my credit profile. I'll see if other lenders in the area are any different. This is a small credit union whom I wanted to establish a long term relationship with. In my example I was dealing with a person selling their home not a commercial property. 

Max