About to buy my first commercial property. It will be owner occupied. What should I look for in a lender?
I don’t know what I don’t know as this is my first time.  Sale price will likely be around $650k. I can do 20 or 25% down. Are all lenders mostly the same and I should continue to focus on interest rates? Or are there other things to consider? This building will be used solely for my business.
[{"id": "iaxrpeu", "text": "Lenders are all different. In general I advise to work with the smallest lender who does what you need. Owner occupied and SBA is a specialty https://ronaldrohdelaw.com/real-estate/questions-to-ask-your-commercial-lender/", "replies": [], "depth": 1}, {"id": "iaxxy57", "text": "There is a lot to consider.  For one how long do you plan to own the building?  This will determine how you want to approach the loan in terms of fixed rate or variable (with or without a swap).  Are wanting to maximize cash flow or burn down principal? You say owner occupied, are you currently occupying it?\n\nTypically, I would highly doubt you will be able to get favorable terms with only 20% down (or even 25%).  60-70% is probably the sweet spot. Owner occupied can be different because you can effectively set the rent which will be capped (within reason) and be able to manipulate the value.  \n\nMy advice is to call around to a bunch of local groups and meet with the commercial lenders.  They will walk you through their process and what they feel is the best for you and then you can compare.", "replies": [{"id": "iay49te", "text": "Length of ownership: Ideally for a while: at least 5-10 years. I think it will generate a nice monthly income if we out grow it. However I suspect the land will have greater value as it is in an area with a lot of new mixed use developments every year replacing old buildings like the one I want to buy. \n\nIt will be owner occupied. I am buying it to move my business into it. \n\nShould I trust the lenders my agent suggests? So far I have a good feeling about him. He seems fair and honest. If not how do I find respected local lenders?", "replies": [{"id": "iay5dy3", "text": "Definitely talk to the lenders your broker suggests they will usually know who is good to work with and who will lend on what type of assets. You can also search local banks and credit unions and call through describing rough loan terms and see what they have.  Many times the local lenders will have a better idea of the area and business and be willing to extend a loan on better terms will less hoops.", "replies": [{"id": "ib44tn8", "text": "Thanks. So the lender (that\u2019s not the other SBA lender my broker sent) immediately started bad mouthing the SBA guy we spoke to first. Kinda turned me off to him.\n\nI really like my broker and don\u2019t want to ruffle his feathers in anyway but this lender personality type is not one I vibe with. Im fine to deal with him (I can handle my mother so I can handle anyone) but my gut says I should at least seek a second opinion. Is there some etiquette thing I don\u2019t know about if I ask him to send someone else?\n\nI\u2019m from miami/NYC where culture is VERY different than here when it comes to stuff like this. It\u2019s much more \u201cwhite\u201d (awful descriptor but I can\u2019t think of a better one) here meaning compliant\u2026 a therapist would say codependent. So I don\u2019t want to sour our agent on us. Any thoughts on this?", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iaykcni", "text": "I spent a while reaching out to local banks, and national lenders and eventually reached out to a local commercial mortgage broker.  They were able to qualify me for 20% down at 4.5% rate for 10 years on a 30 year note.  This was on a 530k purchase multi family.   The bank my commercial mortgage broker found me was by far the best.  It is worth it to me to pay the commercial mortgage broker the 1% or 5k (whichever is greater) for the rate he found me.  After you are more established you will likely be able to find good rates on your own since you will have a proven track record and banks will want to lend to you.", "replies": [{"id": "ib44efk", "text": "So the lender (that\u2019s not the other SBA lender my broker sent) immediately started bad mouthing the SBA guy we spoke to first. Kinda turned me off to him.\n\nSo you just started randomly calling folks? \n\nMaybe I should try that", "replies": [], "depth": 2}, {"id": "ical7qz", "text": "What does it mean to have a mortgage for 10 years ON A 30 YEAR NOTE. I\u2019m new to CRE and don\u2019t understand the 30 year note part. Thanks.", "replies": [], "depth": 2}, {"id": "ihvf3w9", "text": "Do you mind sharing what broker this was? I sent you a PM if you don\u2019t want to share here", "replies": [], "depth": 2}], "depth": 1}]