Commercial real estate financing differs materially from residential investor financing. Income-approach valuation (capitalized NOI) replaces comparable-sales valuation. Lender pool is narrower; underwriting is more rigorous.
Frequently Asked Questions
5+ unit multi-family, retail, office, industrial, mixed-use, and hospitality. The 5-unit threshold separates residential investor from small commercial classification.
Commercial uses income-approach valuation (capitalized NOI) rather than comparable sales. Stricter financial review, tenant analysis, lease abstracts, and operating history typically required.
Hard money commercial: 9-13%. DSCR commercial: 7-10%. Mixed-use 2-4 unit residential with ground-floor retail typically prices more like residential than pure commercial.