Purchase of an income property
Rents, expenses and leases for the property being purchased.
Net income decides the amount.
The partner broker calculates net income and targets lenders based on the property.
Book a callProject types
Business-occupied premises
Company finances and property value.
Renovations and leasing
Renovation budget, vacant space and leasing timeline.
Leasing vacant space
Renovations, carrying costs and tenant search.
Purchase of another location
Purchase price, company finances and working capital.
What lenders review
Net income
The lender deducts expenses, vacancy and non-recurring income.
Current leases
Lease terms, renewals and tenant quality influence the review.
Mortgage payments
Net income must cover the payments and the lender’s required margin.
Renovations and vacancy
The budget, available cash and leasing timeline must be documented.
What gives a lender pause
Dependence on one tenant
A departure can sharply reduce income. The lease and tenant finances matter.
Overstated net income
One-time income and omitted expenses reduce payment capacity.
Poorly budgeted renovations
An incomplete budget can exhaust available cash and delay leasing.
Property difficult to re-lease
A specialized building may require more equity or another valuation method.
What sets the terms
Amount
Value and net income both limit the amount.
Down payment
Use, occupancy and condition influence the required amount.
Term
The term must fit the purchase, renovations or expected hold.
Lender type
The partner broker targets lenders based on the property, income and timeline.
Request steps
- Define the project and amount
- Calculate net income
- Review leases and occupancy
- Gather property documents
- Present the request to selected lenders
- Compare the offers received
What to prepare
- Property description, price and requested amount
- Detailed income and expense statement
- Leases, expiry dates and tenant list
- Owner or operating-company financial statements
- Appraisal, purchase offer and ownership documents
- Renovation budget and leasing timeline
Loan types
| Loan type | When this loan type may apply |
|---|---|
| Conventional commercial loan | For a property whose income and occupancy meet lender criteria. |
| Owner-occupied property loan | The lender reviews company finances and the property value. |
| Renovation and leasing loan | A temporary loan funds renovations and the leasing period. |
| Loan across several properties | Each property’s income and security is presented separately, under a single loan. |
Preparing a request, step by step
All guides
Commercial purchase: required documents
Purchase offer, leases, income, expenses, work and equity.
Reading a commercial lease before buying
Term, indexation, renewal, charges and termination clauses.
Assessing net income on a commercial property
Collected rents, real expenses, vacancy and management fees.
Mixed-use: what lenders review
Residential share, commercial share, leases and zoning.
The coverage ratio explained
How lenders measure a property’s ability to repay.
Commercial down payment: accepted sources
Savings, equity from another property, vendor and partners.
Common questions
Which income is considered?+
The lender starts with rent, then adjusts expenses, vacancy and non-recurring income.
Does vacancy prevent financing?+
Not necessarily. The request must quantify renovations, leasing time and available cash.
Can improvements be included?+
Yes, when the budget, schedule and post-renovation value are documented.
Bank or alternative lender?+
The partner broker compares criteria, costs, timing and conditions across the offers.
How is a major tenant assessed?+
The lender reviews its finances, lease and the effect of a departure.
Does owner-occupant income count?+
Yes. The lender reviews company finances with the property value.
Book a call about your commercial property.
Property, price, income, leases, renovations and target date.
Book a call