"Lenders can get picky about tenant types and lease terms."
Yeah, that's been my experience too. A couple things I've noticed:
- Some lenders flat-out avoid mixed-use properties because they're harder to resell if things go south.
- Had one lender push back hard on a property with a café downstairs and apartments above—ended up having to shop around for someone more flexible.
- DSCR lenders seem especially wary of short-term commercial leases... longer leases definitely help smooth things over.
It's doable, but expect some headaches along the way.
I've run into similar issues, especially with mixed-use buildings. Lenders definitely prefer the stability of long-term leases, but I've seen some flexibility if the tenant has a solid business history—even if the lease is shorter. Curious though, has anyone noticed if lenders are more forgiving when the commercial tenant is a well-known franchise versus an independent business? Seems like brand recognition could ease their concerns a bit...
"Seems like brand recognition could ease their concerns a bit..."
Yeah, I'd say lenders do tend to relax a little if it's a recognized franchise—brand stability helps. But honestly, they'll still dig into the franchisee's personal track record and financial strength. Brand alone won't seal the deal...
Good points, but honestly I've seen lenders get pretty cautious even with well-known franchises. Sure, brand recognition helps at first glance, but I've had deals stall out because the franchisee lacked solid real estate experience or had shaky financials. At the end of the day, lenders care more about who's behind the wheel than what's painted on the car...
Yeah, totally agree with you there. When I was applying for my first DSCR loan, I figured having a solid property would be enough, but the lender really dug into my personal finances and experience. They asked about everything—my savings, job stability, even past rental history. It felt intense at first, but honestly, it made sense. They're lending money based on your ability to handle the investment long-term, not just the property's potential cash flow...
