Property Information

• What type of property is it and what is the current use?
• Was the property used as something else previously?
• Are you aware of any environmental issues (chemicals on site, etc.)?
• How many units are there and how many are currently occupied?
  If the occupancy is low, ask why.
• If the property is mixed-use or multi-family, ask for a rent roll.
• If the property is mixed-use, determine the tier.  We need to understand how much of the rental income is from the residential component versus the commercial.  What type of commercial units are they (i.e., stores, offices, restaurant, etc.)?
• Is the property owner occupied or investment?  If the borrower’s business occupies more than 25% of the market rental income of the property, it will be treated as an owner occupied deal.
• Have you seen the property?  Do you have any photos?
• What is the condition of the property?
• Does the property appear to require rehab?  We really do not lend on properties needing substantial renovations.  We will lend on a property needing minor rehab, but will require a holdback on the loan proceeds.  We need to get a grasp of any rehab, repair or deferred maintenance issues early in the process to minimize unpleasant surprises near closing.

Real Estate Note

We do not lend on excess land, so be sure the value is in the structure itself.  Vacant land does not produce income and property income is the greatest determinant regarding commercial RE values.  Silver Hill is not fond of properties that are too rural because these markets are not liquid.  If our loan goes into default, there are not many potential buyers of commercial RE in a remotely populated area.