Commercial real estate · NMLS #1707407

Commercial Real Estate Loans for Investors

Commercial real estate loans finance properties that earn business income: apartment buildings with 5 or more units, mixed-use buildings, retail, office, warehouse and industrial space. Most lenders approve these loans based on the property's income, not your tax returns.

Get my commercial quote Call (619) 404-6637

5+ unitsplus mixed-use, retail and office

From $100Kloan amounts

Up to 75–80%LTV on purchases

3 waysDSCR, lite doc or full doc

The basics

How commercial real estate loans work

As a broker, we shop your deal across dozens of commercial and investor lenders, including options most banks don't offer, like no-ratio loans for buildings whose numbers don't tell the full story yet.

A commercial lender looks at the building first. The two big numbers are the loan-to-value (LTV), how much you borrow against the property's value, and the debt service coverage ratio (DSCR), the building's net operating income divided by the loan payment. Most commercial programs want a DSCR of about 1.15 to 1.25, meaning the property earns 15–25% more than the mortgage payment. Learn what a good DSCR is.

To prove the income, lenders usually ask for a current rent roll, leases, and a trailing 12-month profit and loss statement (T12) for the property. Your personal credit and cash reserves still matter, and most lenders require a personal guarantee.

Requirements

Commercial loan requirements

These are typical ranges across the lenders we work with. Your exact terms depend on the property, the numbers and your experience.

	Typical range
Property types	Multifamily 5+ units, mixed-use, retail, office, warehouse, light industrial, self-storage, automotive, mobile home parks, and some restaurant and daycare properties
Loan amount	From $100,000; small-balance programs commonly go up to about $2.5 million
Credit score	Many programs start at 650; some accept scores below 600 with more equity; best pricing at 725–750+
Loan-to-value (purchase)	Multifamily and mixed-use up to 75–80%; office, retail, warehouse and similar up to 70–80%
Loan-to-value (refinance and cash-out)	Usually up to 70–75%, lower with lower credit scores
DSCR	1.15–1.25 on standard programs; 1.00 on some no-doc programs; no minimum on no-ratio programs
Experience	First-time investors are allowed by many lenders, often with about 5% less leverage
Documents	Varies by program: full doc (tax returns), lite doc (rent roll and leases, no tax returns), bank statement, or no-doc
Loan terms	30-year fixed, fully amortized, or 5-year ARM; 15-, 25- and 30-year amortization
Prepayment penalty	Common, often a 5-year step-down (5%, 4%, 3%, 2%, 1%); shorter options cost more
Property condition	Standard programs usually want a stabilized property, often about 75% occupied; rural properties are limited

Buying 5 to 9 units? See DSCR loans for 5–9 units. For apartment buildings, see multifamily financing, and read how DSCR loans work for commercial and multifamily.

Loan options

Your commercial loan options: DSCR, lite doc and full doc

We have three ways to qualify a commercial property. The trade-off is simple: the more documentation you provide, the lower the rate tends to be. Less paperwork usually means a faster, easier approval at a higher cost.

Option	What you document	Often a good fit when
DSCR commercial (including no-ratio)	The property's rent and value; no personal or business tax returns. No-ratio options don't require a minimum DSCR.	You want the simplest, fastest approval, or the building's books aren't clean yet
Lite doc commercial	The property's rent roll, leases and operating income; no personal or business tax returns	The building performs well and you'd rather not share your tax returns
Full doc commercial	Two years of personal and business tax returns plus the property's financials	Your returns are strong and you want the lowest cost

Which one is right depends on your credit, the property, your paperwork and how fast you need to close. We'll walk through the options you'd likely qualify for and which one fits your timeline before you commit to anything.

Expect costs for an appraisal, often an environmental report and property inspection, plus title, legal and lender fees. Ask for a full fee estimate up front so you can compare offers fairly.

Commercial loans

No-ratio commercial loans: when the numbers don't tell the real story

A standard commercial loan lives or dies on the building's income. But sometimes that income is real and the paperwork can't prove it: a property that just changed hands, a building coming out of bad management, rents that are being brought up to market, or books that simply weren't kept.

A no-ratio commercial loan doesn't require the property to hit a minimum DSCR. The lender focuses on the property's value, your credit, your cash reserves and your plan for the building. Some no-ratio programs still lend up to about 75% of the value on multifamily and mixed-use purchases and about 70% on other commercial property with strong credit. Refinances and lower credit scores get less leverage, and the rate is usually higher than a standard commercial loan. Many investors use one as a bridge: fix the building and the books, then refinance into a lower-rate loan once the numbers are clean.

Have a lot of equity? Some lenders offer quick-qualifying programs at 50% loan-to-value with very simple documentation, which can be the fastest way to pull cash from a building you own outright.

Real results

A real approval: "Everyone told her no"

"A client inherited a 48-unit apartment building after her husband passed away. She did what a lot of people would do and hired a management company to run it. They were stealing from her and not keeping the books up to date. By the time she came to us, the building's financials were a mess, and every lender she'd talked to had turned her down, because a standard commercial loan needs clean income numbers to approve. We didn't try to force her into that box. We got her approved through our no-ratio commercial option, based on the building and her own strength as a borrower, and she got the money she needed to replace the building's AC units. That's the difference between a lender with one set of rules and a broker who can shop dozens of them."

— Trevor Gravink, Mortgage Broker, ReBroker Buddy (NMLS #1707407)

From the broker

Why commercial loans get declined (and what to do instead)

Messy or missing books. No T12, an outdated rent roll, or numbers that don't match the bank statements. What to do: gather what you have, and ask about no-ratio options while you clean up the records.
The building doesn't hit 1.15–1.25 DSCR. Vacancies or below-market rents drag the ratio down. What to do: a no-ratio or bridge loan can carry you while you lease up, then refinance.
Deferred maintenance. Old roofs, HVAC or parking lots can hurt the appraisal and scare lenders. What to do: include the repairs in your plan, and look at a loan that funds them.
Too much leverage requested. Commercial lenders usually stop around 70–80% LTV on a purchase and lower on a refinance. What to do: plan for a larger down payment, or bring in equity from another property.
Going to only one lender. A bank or a single lender has one set of rules. What to do: work with a broker who can match the building to the right lender.

Weigh it up

Pros and cons of commercial real estate loans

Pros	Cons
Approval based mainly on the property's income	Lower leverage than 1–4 unit loans
No personal tax returns on many programs	Higher rates and more costs (appraisal, environmental)
Can close in an LLC	Prepayment penalties are common
No-ratio options when the books aren't clean	Personal guarantee usually required
Finance multifamily, mixed-use, retail, office and industrial	More documents: rent roll, leases, T12

What clients say

Reviews from our clients

FAQ

Commercial loan FAQ

What credit score do I need for a commercial loan?

Many programs start at 650, and some accept scores below 600 if you have more equity. Scores of 725–750+ get the best leverage and pricing.

How much down payment do I need?

Usually 20–30% on a purchase. Multifamily and mixed-use can go as low as 20–25% down; first-time investors and lower credit scores usually need more.

Can I get a commercial loan without tax returns?

Yes. Many commercial and DSCR programs qualify the loan on the property's income instead of your personal income.

What if my building's financials are a mess?

Ask about a no-ratio commercial loan. It doesn't require a minimum DSCR, so you can get financing while you fix the books, then refinance later.

Can I get a commercial loan on mixed-use property?

Yes. Mixed-use buildings, such as retail on the ground floor with apartments above, are financed by many of the lenders we work with.

How long does a commercial loan take to close?

Often 30–60 days, depending on the appraisal, environmental report and how quickly the documents come in.

Keep exploring

More investor loans

Get started

Get your commercial loan quote

Answer a few quick questions about the property and your plans. There's no credit check to see your options, and we'll shop your scenario across our lenders.

Prefer to talk first? Call (619) 404-6637 or book a free consultation.

Business-purpose loans for non-owner-occupied investment properties. Programs, guidelines and ranges shown are typical of the wholesale lenders we work with and can change at any time. Not a commitment to lend. Broker Buddy LLC, Trevor Gravink NMLS #1707407.