It is normal to not know everything when getting into a new business, as it takes extensive practice and experience to learn what mistakes to avoid. It is very helpful to have a mentor or someone to identify these mistakes that you should never make.

Here I have identified 5 very serious mistakes that could land you in deep commercial real estate trouble! I have learned by experience, and, unfortunately, not every experience was a good one. If you can avoid learning the hard way, then take this advice, so you do not have to experience the hardships of making any of the following mistakes.

Top Mistake #1: Quitting Your Day Job
It is true that commercial real estate is a solid, tried and true business that can be instrumental in creating the lifestyle of which you have always dreamed. However, when you are just starting out, it can take one to two years to see a profit from your investment (unless, of course, you specialize in quick turning property).

The commercial real estate deals that are going to make you set for the rest of your life involve long term commitments, unlike that of residential, single family houses.
The key is to not stop your monthly cash flow while beginning to invest in commercial real estate. The bills still need to be paid until you have a few commercial real estate deals under your belt, and you can afford, without peril, your everyday living expenses for you and your family.
There will come a time, hopefully sooner than later, that you will not have to work another day in your life, unless, of course, you want to. However, until that day comes, make sure you are making enough money, either through a job, other business, or the much more short term commitment of residential real estate.

Top Mistake #2: Not Hiring an Attorney
Having legal help is one of the most important aspects of commercial real estate investments. Things will go wrong, no matter how careful and astute you are. Legal matters can evolve in places you never think they would, and they can be very costly. In fact, a poorly written contract, an overlooked item, or a difficult buyer/seller, can take you for all that you’ve got.
We have a saying around our office, which is “Hire the best attorney you can’t afford.” A good commercial real estate attorney can keep your business, investments and personal assets safe from any problems that might arise. Whether you use paid legal, or have an attorney that you work with closely all the time, get a good, and yes, expensive attorney to get the job done right the first time. This is an area in which you must not compromise.

Top Mistake #3: Performing Tasks You are Not Qualified to Do
Commercial real estate investors just starting out and those who are seasoned must never do the work of a professional to whom you can pay small amounts of money when compared to the amount of money that can be made on a single deal. It is very tempting to save every dollar possible and do the work of an appraiser, accountant, attorney, property manager and other such real estate professionals.
Leave these items to the professionals, and focus on what you do best: locate deals, put them under contract, and reap the return on your investment. Leave these otherwise mundane tasks to the professionals that make your life much easier. You must position yourself properly in this business, and doing the work of 20 people is not the right approach. You are an investor. Act like a commercial real estate investor, and perform the duties of a commercial real estate investor. The small amount of money you pay to the other professionals to ensure that your business operates properly is well worth it.

Top Mistake #4: Personally Guaranteeing Large Loans
Non-recourse is the only way to go in commercial real estate, unless, of course, you have millions of dollars to lose by personally guaranteeing large loans. Even if you have millions of dollars to personally guarantee large loans, I don’t think you really want to risk losing it to a deal gone bad.
Luckily for us, both public and private lenders understand that personally guaranteeing a $3,000,000.00 loan is a very risky event. That is why the property itself is usually what guarantees the loan. The property is what has the equity and value, not necessarily the person who owns it. If you do personally guarantee a loan, and the deal goes bad, you could literally lose everything! A simple rule: don’t personally guarantee a loan you can’t cover if something goes wrong because things will go wrong. Almost every lender will negotiate non-recourse with a valuable property. With private lenders it may be a little more difficult. If that is the case, avoid the risk, and find another lender who will work with you.

Top Mistake #5: Falling for Sales Pitches
It is very tempting to listen and hang onto every word a broker, agent, or even an owner speaks about their property in the hottest location, with a super motivated seller, and a great upside potential. Really, none of these reasons are worth any value until they are verified.

Always perform a thorough investigation and verify all claims made by the broker, agent or owner. Never move into a deal too quickly without doing the research! You will be sorry because something will go wrong. Be a sharp, informed and prepared commercial real estate investor. Avoid these 5 mistakes that can cause huge problems in your commercial real estate endeavors!

Commercial real estate note selling is based on certain fixed standards. The outstanding balance amount and the period of time are important for most buyers. Second in importance is the value of the property. People generally sell part of their commercial real estate notes instead of selling them as a whole. Partial sales are more profitable in most cases.

When a business involving real estate is sold, two notes are generally created, one each for the business and the real estate. The business note is similar to private mortgages and trust deeds, but it is not secured by real estate. A business note is generated when a person sells a business and decides to carry on the financing and collect regular payments from the new business owner.

A potential seller can sell commercial real estate notes as a whole, or a part of them. The best way to sell commercial real estate notes is to browse websites that display real estate note listings. Visitors to these websites range from individual buyers to companies and financial institutions. The chances of getting a better deal are very high. Real estate brokers are the natural source for selling commercial real estate notes. They can assist you in finding an ideal buyer. Advertising in local newspapers and real estate magazines also helps you sell commercial real estate notes.

• Describe the premises • Specify the lease term • Indicate the rental or lease payment amount
Many times, you will be dealing with a five-year lease. Therefore, you need to explain in the lease, how rental increments will happen every year over the period of the lease. You could also include additional tenant conduct, indicating what tenants can or cannot do. This is where you would specify whether they could assign the lease, sublease it, or limit it to sub-leasing (subject to landlord’s approval).

Signage Signage becomes a problem in some places such as Florida, because of hurricanes. One of the most serious threats to life and limb in a hurricane is not the wind per Se, but the debris that the wind blows around.

If you have a sign that is not well anchored and a hurricane comes along and tears off chunks of glass or plastic, these can become deadly projectiles. Hence, you get into a lot of code issues about how signage has to be constructed, type of materials, and other similar issues. So, in your lease, you must ensure that it includes a clause that specifies that no signs can be erected on the property without:

1. Landlord approval 2. Proper permitting through the local county officers or local city officers, so that signs meet code and conform to local rules and regulations
Additional Tenant Expenses Include language in the lease that itemizes the expenses for which the tenant will be responsible, such as taxes, utilities, and insurance. A prudent policy is to require that all your tenants carry a million dollar liability policy on anything that happens on the premises.

Otherwise, if something happens as a function of their business and they are not sufficiently covered, the problem rebounds to you, because it’s your building. Be sure that your tenants furnish proof of insurance before you allow them to occupy the premises.

Tenant rights, landlord services, common areas, and common area expenses that you are going to incur and pass on to the tenant, are all standard clauses. Other clauses may pertain to preserving the premises, making repairs, maintenance, and surrender of the property.

Tip: If your tenants want to change something in the building, they must come to you for approval. After all, it’s your building!
You should also consider the rules for alterations, surrender, damage destruction, and protecting the landlord’s subordination. Be sure to specify that you have the right to enter and inspect the premises.

Other commercial real estate lease clauses to consider are those for indemnification- being held harmless, evidence of default and remedies, security for performance, security deposits, and other similar rights. Obtain an experienced real estate attorney who specializes in commercial leases, and can review and revise your lease appropriately.

Building Owners and Managers Association (BOMA) BOMA publishes standard methods for measuring floor area in industrial buildings. You may not think this subject is an important issue, but there are many ways to measure that can affect your rental income.
Landlords have been sued, sometimes after many years, for leases that were found to include inaccurate square footage descriptions. To protect yourself always use the BOMA method and include that description in one of your lease clauses.

Including the proper commercial real estate lease clauses in your commercial real estate lease agreement will help protect you and your tenants, which is always good business.

The emotion seen with owners in residential property is not a problem in commercial real estate however you do need to know what you are talking about given that commercial is a complex investment property type and the property owners are usually very aware of what is going on. For this reason, and to all the newcomers to the industry, you must know your product very well and be able to talk to it from many angles. Without this many property owners will discount your relevance to them.

Get Your Head and Thinking Straight
B2B cold calling is an essential part of daily activities in commercial real estate however it frequently fails because most salespeople sound like they are making a cold call. Here are two essential rules of cold calling success in commercial real estate:

It is the ‘how you do it’ that really matters to the call conversions to appointments.What you ‘think about’ in doing the regular call process also is a critical part of the method.Change the Name – and you will change the results you get
‘Cold calling’ implies something less than ‘warm’ and pleasant. To solve this problem, I prefer to think of it as ‘Call Direct’. It is a more positive mental image than anything that is ‘cold’! To be successful in making these calls, you must sell the process to yourself and believe that you are good at it.

When calling a prospect in commercial real estate, most salespeople are trying to ‘get’ something from someone. They are trying to ‘get’ an appointment or ‘get’ a listing. The fact of the call is that no one wants to ‘give’ something to someone they do not know, like, trust and respect. This is why most commercial salespeople fail miserably at this process.

But ‘getting’ is not the purpose of ‘call direct’. ‘Call direct’ is a discarding or disqualifying process. It is just like panning for gold or digging for diamonds. You have to turn over a lot of dirt before you find the gems. If you do not understand or accept this principle, then you will become frustrated and think that your efforts are not working. You will give in far too easily (this is what most people do and they therefore struggle to achieve great levels of listings and transactions).

Your objective in ‘call direct’ is to disqualify as many people as possible, as quickly as possible. That eliminates the time and money wasted in sending literature or seeing people who will never use your services, and it stops the fruitless follow-up calls that lead nowhere but to frustration.

You only have 30-45 seconds to deliver a specific and compelling reason for the person on the other end of the telephone to ‘want’ to continue the conversation. Skip the small talk and get right to the point. Be a ‘top performer’ in the call process.
You will be most effective when your 30-45 seconds causes the prospect to identify a real estate related problem in their mind that you can help them fix. People will talk to you if you shed light on a problem they need to have fixed; only for that reason.
Problems in commercial real estate typically focus around loss of rent, tenant problems, wasted time, inefficiencies in returns, competition pressures, disposal needs, functioning of the property, age of the asset, or repositioning etc.
If the prospect (not you) identifies something that is having negative ramifications on their property performance (a problem) AND they are serious about getting rid of that problem, then you ‘may’ have a possible reason to continue.

If there is a possible fit between you, then you can set an appointment to explore the possibilities of helping that prospect in some way get rid of that problem. There is no point in setting up an appointment simply because the other person lets you do so. You must determine that they are relevant to you, they are the decision makers, and that they have an interest in what you are talking about.

Protect your time by qualifying the correct people over the telephone before you make that appointment. There are a lot of prospects out there who think that they are the ‘decision maker’, and in reality are nowhere near those that are. Think like a ‘top performer’ and protect your time; it is the most important resource that you have.

Interestingly, there seems to be a wave of positive economic news coming from the media these days and discussion about the problems in the residential mortgage industry have, at least for now, died down. Whether the positive economic news is accurate is another issue — check out Josh’s commentary here about the next wave of residential foreclosures.

Thus, the shift of attention from the residential mortgage problems to commercial real estate makes sense. Commercial lending is different than residential real estate and it’s possible that the average consumer isn’t really interested in figuring out what’s wrong with commercial lending. Many of these people are still trying to save their homes.

Commercial real estate loans are structured differently from residential mortgage loans. Most commercial real estate loans have a shorter term, say, ten years. At the end of the loan term, the loan is not paid in full as a result of making monthly payments over the loan term. Instead, a percentage of the loan is due and payable as a lump sum or balloon payment.

The basic problem is that many of the commercial real estate loans that were made over the last decade will be coming due over the next couple of years. Many borrowers planned to refinance the loan, but with the commercial lending markets drying up, many borrowers face foreclosure if they cannot obtain financing.

Similar to residential mortgages, many of these commercial loans were made without regard for acceptable underwriting standards so that they could feed the demand for commercial mortgage backed securities (“CMBS’”).

I’m already seeing commercial property owners asking for help with commercial loan audits to help them get a commercial loan modification. I’m also currently auditing a loan on behalf of a commercial investor being sued by the second position lender for a deficiency after a foreclosure.

In an article published in early July, the Washington Post discussed the Treasury’s “Plan C”, of which commercial real estate is seen as one of several problems that could derail economic recovery. The Post reported:
“The officials in charge of Plan C — named to allude to a last line of defense — face a particular challenge in addressing the breakdown of commercial real estate lending.

Banks and other firms that provided such loans in the past have sharply curtailed lending. That has left many developers and construction companies out in the cold. Over the next few years, these groups face a tidal wave of commercial real estate debt — some estimates peg the total at more than $3 trillion — that they will need to refinance. These loans were issued during this decade’s construction boom with the mistaken expectation that they would be refinanced on the same generous terms after a few years.

The credit crisis changed all of that. Now few developers can find anyone to refinance their debt, endangering healthy and distressed properties.”
Or, as explained by Jon Greenlee, the Fed’s Associate Director, Division of Banking Supervision and Regulation, in his testimony before the Federal Reserve on July 9, 2009:
“The decline in the CRE market has been aggravated by two additional factors. First, the values of commercial real estate increased significantly between 2005 and 2007, driven by many of the same factors behind the residential housing bubble, resulting in many properties either purchased or refinanced at inflated values. Prices have declined about 24 percent since their peak in the fall of 2007 and market participants expect significant further declines. Second, the market for securitized commercial mortgages (CMBS), which accounts for roughly one-fourth of outstanding commercial mortgages, has been largely dormant since early 2008 while many banks have substantially tightened credit. The decline in property values and higher underwriting standards in place at banks will increase the potential that borrowers will find it difficult to refinance their maturing outstanding debt, which often includes substantial balloon payments.
The higher vacancy levels and significant decline in value of existing properties has also placed pressure on new construction projects. As a result, the construction market has experienced sharp declines in both the demand for and the supply of new construction loans since peaking in 2007.

The negative fundamentals in the commercial real estate property markets have broadly affected the credit performance of loans in banks’ portfolios and loans in commercial mortgage backed securities. At the end of the first quarter of 2009, there was approximately $3.5 trillion of outstanding debt associated with commercial real estate. Of this, $1.8 trillion was held on the books of banks, and an additional $900 billion represented collateral for CMBS. At the end of the first quarter, about seven percent of commercial real estate loans on banks’ books were considered delinquent. This was almost double from the level a year earlier. The loan performance problems were the most striking for construction and land development loans, especially for those that finance residential development. Notably, a high proportion of small and medium-sized institutions continue to have sizable exposure to commercial real estate, including land development and construction loans, built up earlier this decade, with some having concentrations equal to several multiples of their capital.”

Syndicated ownership of real estate was introduced in the early 2000s. Because many early investors were hurt by collapsed markets or by tax-law changes, the concept of syndication is currently being applied to more economically sound cash flow-return real estate. This return to sound economic practices will help ensure the continued growth of syndication. Real estate investment trusts (REITs), which suffered heavily in the real estate recession of the mid-1980s, have recently reappeared as an efficient vehicle for public ownership of real estate. REITs can own and operate real estate efficiently and raise equity for its purchase. The shares are more easily traded than are shares of other syndication partnerships. Thus, the REIT is likely to provide a good vehicle to satisfy the public’s desire to own real estate.

A final review of the factors that led to the problems of the 2000s is essential to understanding the opportunities that will arise in the 2000s. Real estate cycles are fundamental forces in the industry. The oversupply that exists in most product types tends to constrain development of new products, but it creates opportunities for the commercial banker.

The decade of the 2000s witnessed a boom cycle in real estate. The natural flow of the real estate cycle wherein demand exceeded supply prevailed during the 1980s and early 2000s. At that time office vacancy rates in most major markets were below 5 percent. Faced with real demand for office space and other types of income property, the development community simultaneously experienced an explosion of available capital. During the early years of the Reagan administration, deregulation of financial institutions increased the supply availability of funds, and thrifts added their funds to an already growing cadre of lenders. At the same time, the Economic Recovery and Tax Act of 1981 (ERTA) gave investors increased tax “write-off” through accelerated depreciation, reduced capital gains taxes to 20 percent, and allowed other income to be sheltered with real estate “losses.” In short, more equity and debt funding was available for real estate investment than ever before.

Even after tax reform eliminated many tax incentives in 1986 and the subsequent loss of some equity funds for real estate, two factors maintained real estate development. The trend in the 2000s was toward the development of the significant, or “trophy,” real estate projects. Office buildings in excess of one million square feet and hotels costing hundreds of millions of dollars became popular. Conceived and begun before the passage of tax reform, these huge projects were completed in the late 1990s. The second factor was the continued availability of funding for construction and development. Even with the debacle in Texas, lenders in New England continued to fund new projects. After the collapse in New England and the continued downward spiral in Texas, lenders in the mid-Atlantic region continued to lend for new construction. After regulation allowed out-of-state banking consolidations, the mergers and acquisitions of commercial banks created pressure in targeted regions. These growth surges contributed to the continuation of large-scale commercial mortgage lenders [http://www.cemlending.com] going beyond the time when an examination of the real estate cycle would have suggested a slowdown. The capital explosion of the 2000s for real estate is a capital implosion for the 2000s. The thrift industry no longer has funds available for commercial real estate. The major life insurance company lenders are struggling with mounting real estate. In related losses, while most commercial banks attempt to reduce their real estate exposure after two years of building loss reserves and taking write-downs and charge-offs. Therefore the excessive allocation of debt available in the 2000s is unlikely to create oversupply in the 2000s.

No new tax legislation that will affect real estate investment is predicted, and, for the most part, foreign investors have their own problems or opportunities outside of the United States. Therefore excessive equity capital is not expected to fuel recovery real estate excessively.

Looking back at the real estate cycle wave, it seems safe to suggest that the supply of new development will not occur in the 2000s unless warranted by real demand. Already in some markets the demand for apartments has exceeded supply and new construction has begun at a reasonable pace.

Opportunities for existing real estate that has been written to current value de-capitalized to produce current acceptable return will benefit from increased demand and restricted new supply. New development that is warranted by measurable, existing product demand can be financed with a reasonable equity contribution by the borrower. The lack of ruinous competition from lenders too eager to make real estate loans will allow reasonable loan structuring. Financing the purchase of de-capitalized existing real estate for new owners can be an excellent source of real estate loans for commercial banks.

As real estate is stabilized by a balance of demand and supply, the speed and strength of the recovery will be determined by economic factors and their effect on demand in the 2000s. Banks with the capacity and willingness to take on new real estate loans should experience some of the safest and most productive lending done in the last quarter century. Remembering the lessons of the past and returning to the basics of good real estate and good real estate lending will be the key to real estate banking in the future.

Basically, commercial real estate deals with all properties, both rental and for sale, that are not residential. So any grocery store, book store, or coffee shop that moves into an area must deal with a commercial real estate representative to make the buy or leasing agreement. Likewise, builders who focus in buildings that will be used for non-residential belongings should use a commercial real estate negotiator in their planning and to lease or sell their buildings out for business.

Financing sources for commercial real estate include mortgage banking firms, savings and loan institutions, regional banks, insurance companies, and private investors. Commercial real estate financing can take on very different terms, and the way deals are structured is based on a number of factors including:

o Anticipated use of the property
o Geography
o Size of real estate
o Perceived risk to lender
o Market conditions
o Anticipated returns from the property
The areas mentioned above must not be forgot to be examined the business owners to seeking to seeding for their commercial real estate financing. And then, the need is of the type of loans offered by the lenders in accordance with their requirements and anticipated growth.

If you feel commercial real estate is something you are not able to accomplish, I would have to say you are greatly mistaken. With a little knowledge and a great amount of motivation, anyone can succeed in this business. The benefits far outweigh the costs, as you can create a life of which many dream, but never actually experience.

The first great benefit is one that allows you to create a schedule that best fits your personal situation. In commercial real estate you can work full or part-time and still create wealth and equity you never knew was possible!

Commercial real estate can easily be a part-time job that brings in incremental cash flow. You can even start out part-time, and hold a job until you have enough cash flow and money so that, eventually, all you do is commercial real estate.

Commercial real estate as a full-time job allows you to have many benefits such as being your own boss and having the ability to work from home. You can create your very own commercial real estate business and quickly build a strong net worth as well as positive cash flow.

Another great benefit is it does not take years of training, or years of moving up the corporate ladder to be successful. You can start right now, today! You can begin your commercial real estate endeavors whenever you so desire because there are very few barriers of entry to this industry.

Probably the most enticing benefit of commercial real estate is profit. Huge profits, in fact, which can be made with a limited amount of effort. You can make the same amount of money quick turning or selling 100 single family residences as you would make with a single commercial real estate deal. The profits can be astonishing!

It takes the same amount of work for every commercial real estate deal, meaning you must go through the same processes each time. Why not maximize your result and go for the larger returning deals, rather than the smaller ones? Synergy is a key word in commercial real estate, as small changes can yield huge results.

In commercial real estate, your financial investment is very low, perhaps even non-existent. You can purchase property with 100% of other people’s money (OPM), and create large profits for yourself. This is the only industry where there are literally hundreds of millions of dollars just waiting to be borrowed! Find the money and get to investing! As you can see, commercial real estate meets and exceeds the expectations many people wish they could have in their own career and personal lives. You can make commercial real estate whatever it is you want it to be… a supplemental income or primary career. Take some time and imagine that all these great benefits were yours. How would life be?

If you think commercial real estate is more than you can ever dream of, begin your research and start learning all about it. Find people working in the business, and get acquainted with the investment strategies and methods that can return huge profits in a very short amount of time. Once you truly understand and experience firsthand what commercial real estate has to offer, I know you will look no further for other money-making, equity building, life creating businesses.

COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 1: Tax Returns versus Stated Income
Most traditional banks will require several years of tax returns in order to qualify for a commercial real estate loan. The alternative is to use a Stated Income lender that does not verify personal income or assets. Many borrowers will simply not qualify for a commercial mortgage loan if tax returns are used due to high business expenses (and low net income). Many lenders using tax returns will also continue to verify income after the loan closes. Stated Income lenders will not engage in this practice.

COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 2: Special Purpose Properties
It is becoming increasingly difficult to get commercial loans for special purpose properties. Properties that do not fall in the categories of apartments or retail/office buildings are often placed in this special purpose classification. This means that business acquisition loans for commercial properties such as restaurants/bars and auto service businesses are frequently hard to find. Commercial financing will be even more difficult to locate for such specialized properties as churches, funeral homes, nursing homes and assisted living facilities.

COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 3: Recall/balloon features
These terms are used by many banks to effectively shorten most commercial real estate loans to 3-7 years.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 4: Short-term loans (less than fifteen years)
15-40 year commercial property loans without recall/balloon features are available.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 5: Up-front Commitment fees
Under most circumstances, commercial borrowers should not pay such a fee. Please note that processing/retainer fees are not included in this discussion of commitment fees. Processing/retainer fees should be viewed as an acceptable and standard business practice when dealing with commercial real estate loans.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 6: Business Plans
Under most circumstances, commercial borrowers should not use a lender that requires a business plan.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 7: Cross-collateralization
Commercial borrowers should not be required to use their personal assets as collateral for a commercial property loan.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 8: Sourcing and seasoning assets. Seasoning of ownership.
This particular problem will not be relevant to all business borrowers. However, if it is relevant, you should seek out a lender without sourcing and seasoning requirements or limitations. Most banks have strict guidelines for sourcing and seasoning of assets or ownership to qualify for commercial real estate loans. For a purchase, commercial lenders will frequently want documentation about where the down payment is coming from (sourcing). Commercial lenders will also frequently have very specific requirements stipulating that the funds must have been in a specific account for a specific period of time, often 3-6 months or longer (seasoning). Seasoning of ownership is similar to seasoning of funds, except this requirement involves the minimum time someone has owned a commercial property before they can refinance the property.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 9: Requirement to sign IRS Form 4506
IRS Form 4506 authorizes the lender to obtain a borrower’s tax returns directly from the IRS. This form is routinely required by most traditional banks and many other commercial lenders for a business acquisition loan. Commercial borrowers using a Stated Income lender with limited documentation requirements will avoid this requirement.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 10: Debt Service Coverage Ratio (DSCR) in excess of 1.2 for a business acquisition loan
The most flexible approach to DSCR for a commercial property loan will require a DSCR in the range of 1 to 1.2, with exceptions permitting a DSCR less than 1.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 11: Minimum commercial property loan size that is too high for your commercial mortgage needs.
It is not unusual to encounter a minimum commercial real estate loan requirement of $500,000 to $1,000,000.
COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 12: Excessive length of the commercial real estate loan process
Many traditional banks require three to nine months to close a commercial mortgage. A more action-oriented commercial lender will close commercial real estate loans in 45 to 60 days.

Throughout the process of negotiating the sale contract, all parties must keep their eye on what the Buyer’s lender will reasonably require as a condition to financing the purchase. This may not be what the parties want to focus on, but if this aspect of the transaction is ignored, the deal may not close at all.

Sellers and their agents often express the attitude that the Buyer’s financing is the Buyer’s problem, not theirs. Perhaps, but facilitating Buyer’s financing should certainly be of interest to Sellers. How many sale transactions will close if the Buyer cannot get financing?
This is not to suggest that Sellers should intrude upon the relationship between the Buyer and its lender, or become actively involved in obtaining Buyer’s financing. It does mean, however, that the Seller should understand what information concerning the property the Buyer will need to produce to its lender to obtain financing, and that Seller should be prepared to fully cooperate with the Buyer in all reasonable respects to produce that information.