Many people are having difficulty in the commercial real estate market at the moment. One of the problems is that even though everyone knows there was a crisis in the residential market, there’s been big trouble in the commercial real estate market, too.

And therein lies the rub. Prices are down, and quite a few commercial properties are going into foreclosure so the banks are scrutinizing those loan applications extra hard. And, just like residential properties, lenders are looking extra-carefully at not only the borrower, but at the property as well. Does it have positive cash flow? Does it have a good track record of generating money? Is it likely to generate money in the future?

In terms of the borrower, they’ll be looking at your entire credit picture. Or, if you’re buying as a corporation or limited liability partnership, they’ll be examining the business’s books too.

Lenders are more skittish these days, because vacancies in a commercial property could dry up the owner’s ability to make mortgage payments. So you could be wise to check with a few commercial lenders to see what they have to say. If they all come back negative, perhaps you’re missing the message: It’s too risky.

Otherwise, ask the lenders exactly what they want to see from you besides a good credit score.

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Homebuyer, Housing Market