Commercial mortgage due diligence helps a borrower and lending team understand the property, its income, its physical condition, and the ownership structure before a financing decision is made. A clear checklist can reduce avoidable surprises without promising a particular loan result.
Review the Property and Title
Organize the purchase contract or refinance information, title materials, survey or site documents when applicable, zoning and use information, leases, and records of material property obligations. Differences in ownership names, unresolved title matters, or incomplete lease files should be identified early.
Confirm the Operating Story
Gather the current rent roll, executed leases and amendments, operating statements, tax records, insurance documents, service contracts, and information about vacancies or concessions. Compare totals and prepare explanations for material changes in income or expenses.
Document the Borrower and Business Plan
Depending on the transaction, the lender may review entity documents, ownership charts, financial statements, real-estate schedules, and the borrower’s plan for operating or improving the asset. Keep assumptions grounded in records and disclose material obligations or guarantees.
Prepare for Questions
A short narrative can explain recent renovations, tenant turnover, unusual expenses, deferred maintenance, or changes in management. Good preparation does not guarantee approval, but it can make the property’s financial and operational picture easier to evaluate.
This article is for general educational purposes only and is not personalized financial, legal, or tax advice. Requirements vary by lender, property, transaction structure, and borrower circumstances.
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