Commercial Real Estate

A commercial loan is specifically designed for non-owner occupied properties intended for investment purposes, distinguishing it from residential loans. These loans can be applied to a variety of property types, including but not limited to residential investment properties, apartments, offices, retail spaces, hotels, and more, supporting investors in achieving their commercial real estate objectives.

At Sentinel, our loan approval process includes thorough confirmatory underwriting to ensure a secure and mutually beneficial lending arrangement. Initially, we focus on the property, verifying that its value aligns with independent appraisals. We then examine the financial aspects closely.

For the borrower, we require:
- Liquidity: Borrowers should possess four to six months' worth of liquidity (in cash or cash equivalents) based on the total loan amount, or at least 10% of the loan amount.
- Net Worth: The borrower's net worth should be at least equal to the loan amount as demonstrated on the balance sheet.
- Relevant Experience: Borrowers should have experience in ventures similar to the one being financed within the last three years.
- Financial History: We check to ensure there are no financial bankruptcies, foreclosures, or deed-in-lieu issues in the past five years.

These criteria help us maintain the integrity and reliability of our lending services, ensuring success for both our borrowers and our investment partners.

In evaluating loan applications, Sentinel considers three primary leverage values to determine the appropriate loan structure:

Current As-Is Value: This reflects the property's current market value, based on an appraisal of its condition as it stands or the purchase price if it's being acquired. Exceptions may apply under extraordinary circumstances.

As-Repaired Value (ARV) or As-Completed Value: This projects the property's value upon the completion of any stabilization efforts, construction, rehabilitation, or renovation. It's a crucial figure that helps us assess the potential upside of the investment.

Loan to Cost (LTC): LTC represents the ratio of the loan amount to the total project cost, providing insight into the financial structure of the project.

Loan to Value (LTV): LTV compares the loan amount to the property's appraised value, offering a measure of the loan's security against the property's worth.

The initial advance, or first-day funding, is determined as a percentage of the As-Is Value. Both LTC and LTV ratios are pivotal in shaping the terms of our loans, ensuring they align with our lending standards and the borrower's financial health.

For those interested in obtaining financing for fix-and-Flip, renovation, or ground-up construction projects, Sentinel requires a short list of documents to assess and process your loan application effectively:

- Application: A completed and signed loan application form.

- Line-item Budget: A detailed budget breaking down the costs associated with the project.

- Experience: Documentation or a portfolio showcasing your experience with fix-and-flip projects or ground-up constructions.

- General Contractor Details: Information about the general contractor you plan to work with, including their experience and past projects.

- Property Information: Key details about the property, such as size, current condition, and any existing equity.

- Refinancing Details (if applicable): Original purchase price and date, details of any improvements made, and information about any current lending arrangements, including lender name and outstanding loan amount.

- Purchase Information (if purchasing): The agreed purchase price and the expected closing date.

- Entitlements and Permit: The status of any necessary entitlements and construction permits.

- Comparable Property Values: Information on similar properties in the area to support the project's expected value post-completion.

This detailed information helps us to thoroughly evaluate your project's feasibility, ensuring that our lending solutions align with your investment goals and project requirements.

For clients seeking financing options such as term loans, DSCR loans, or non-renovation bridge loans, Sentinel has streamlined the application process to ensure efficiency and clarity. Below is the list of required documents needed to evaluate and proceed with your loan application:

- Application: Please complete and sign the official loan application form

- Experience: We require evidence of your experience with investment properties

- Property Information: Essential details about the property are needed, including its size, the current condition, and any equity already invested.

- Refinancing Details (if applicable): For refinancing applications, provide the original purchase price, purchase date, a summary of improvements made, and details about existing loans, including the lender’s name and the loan amount.

- Purchase Information (if purchasing): Indicate the purchase price and the anticipated closing date of the transaction.

- Comparable Property Values: Please provide information about comparable properties in the vicinity.

- Property Management (for rentals): If the property is a rental, details about the designated property manager, including their experience and qualifications.

- Financials of the Last Full Year: A detailed profit and loss statement is required to review the revenue breakdown and operating expenses.

- Year-to-Date Financials: Current financial statements up to the present date are necessary for an up-to-date assessment.

- Rent Roll: This should detail the unit mix, including the bedroom and bathroom count, square footage, and rental price per unit.

These documents enable Sentinel to comprehensively understand your project, ensuring that we can offer the most suitable financing solutions tailored to your specific needs and goals.