--- title: How To Underwrite Commercial Loans - Part 2 description: Want to learn about commercial loans? Contains chapters 11 through 20, plus a link to first ten chapters, of my commercial loan training manual, How To Underwrite Commercial Loans. Incredibly instructive! image: https://info.c-loans.com/hubfs/Screen%20Shot%202018-10-22%20at%208.31.36%20PM.png --- [![c-loans-logo-2025](https://info.c-loans.com/hs-fs/hubfs/images/c-loans-logo-2025.png?width=183&height=86&name=c-loans-logo-2025.png)](https://c-loans.com) [Terms of Use](https://www.c-loans.com/terms-of-use) | [Disclaimer](https://www.c-loans.com/disclaimer) | [Blog](https://info.c-loans.com/) # Commercial Loans and Fun Blog ## [How To Underwrite Commercial Loans - Part 2](https://info.c-loans.com/how-to-underwrite-commercial-loans-part-2) Posted by [George Blackburne](https://info.c-loans.com/author/george-blackburne) on Tue, Nov 20, 2018 - [Tweet](https://twitter.com/share) ![Screen Shot 2018-10-22 at 8.31.36 PM](https://info.c-loans.com/hs-fs/hubfs/Screen%20Shot%202018-10-22%20at%208.31.36%20PM.png?width=300&name=Screen%20Shot%202018-10-22%20at%208.31.36%20PM.png)You really should pay close attention to what I am teaching you here.  This is the meat-and-potatoes of commercial real estate finance ("CREF"). Let's suppose you're a starving commercial loan broker, and you can't afford my wonderful nine-hour course, [How To Broker Commercial Loans](https://www.c-loans.com/mortgage-brokers/learn-to-broker-commercial-loans).  Maybe you can't even afford to buy the written training manual, [Underwriting Commercial Loans](https://www.c-loans.com/mortgage-brokers/learn-to-underwrite-commercial-mortgage-loans-only-199).  I have good news.  You can now access much of this wonderful training for ***free*** on C-Loans.com. C-Loans is slowly making this wonderful training manual available for free online.  We covered the first ten chapters in a recent blog article, [How To Underwrite Commercial Loans - Part 1](https://info.c-loans.com/how-to-underwrite-commercial-loans-part-1).  Today's training article continues with Chapters 11 through 20.   [![Submit Your Loan to 750 Commercial Lenders Using C-Loans.com.  It's Free!](https://no-cache.hubspot.com/cta/default/37671/9f0b2bed-fb9b-455d-b8be-17d8f7960a2a.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/9f0b2bed-fb9b-455d-b8be-17d8f7960a2a)   ![Pizza Rolls-1](https://info.c-loans.com/hs-fs/hubfs/Pizza%20Rolls-1.jpg?width=400&name=Pizza%20Rolls-1.jpg)   Before we get into today's training, I want you consider the absolute cheapest way to receive commercial leads.  For just $1,000 per year, you'll receive on average one to five commercial leads per day.  Because you pay upfront, **all commercial mortgage brokers and lenders qualify to buy leads from CommercialMortgage.com.**  (Our other portal, C-Loans.com, uses a different model.  C-Loans only gets paid when deals close, so any lead buyer has to be rich and pristine.)  Do you own a bridge lender?  Leads from [CommercialMortgage.com](http://www.commercialmortgage.com) are the Deal of the Century.   [![Dirt Cheap Commercial Leads Choose Type, Size, States, Location](https://no-cache.hubspot.com/cta/default/37671/5cb4ca00-2cc5-4cbd-a3f7-6e2d89bc5bf9.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/5cb4ca00-2cc5-4cbd-a3f7-6e2d89bc5bf9)   ![Free Cat](https://info.c-loans.com/hs-fs/hubfs/Free%20Cat.jpg?width=455&name=Free%20Cat.jpg)   Chapter 11:  As you branch out into commercial real estate finance ("CREF") for the first time, your early loans should be apartment loans.  This chapter explains how to prepare a ***Pro Forma Operating Statement*** (a budget for the next twelve months, while setting aside reserves for future replacements) on an apartment building. [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/how-to-prepare-an-apartment-pro-forma ](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/how-to-prepare-an-apartment-pro-forma) Chapter 12:  Here is what an apartment Pro Forma Operating Statement should look like: [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/sample-apartment-pro-forma-operating-statement](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/sample-apartment-pro-forma-operating-statement) [![Free List of 200 Commercial Lenders](https://no-cache.hubspot.com/cta/default/37671/3da67ca8-0ae4-4537-a365-87388c9287a1.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/3da67ca8-0ae4-4537-a365-87388c9287a1) ![Mellon Collie](https://info.c-loans.com/hs-fs/hubfs/Mellon%20Collie.jpg?width=538&name=Mellon%20Collie.jpg) Chapter 13:  When you are ready to expand into commercial loans, you will need to know how to prepare a Pro Forma Operating Statement on a commercial building.  This chapter explains how. [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/how-to-prepare-a-commercial-or-industrial-pro-forma](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/how-to-prepare-a-commercial-or-industrial-pro-forma) Chapter 14:  Here is what a sample Triple-Net Pro Forma Operating Statement looks like: [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/sample-triple-net-pro-forma-operating-statement](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/sample-triple-net-pro-forma-operating-statement) [![Free List of 3,159 Commercial Lenders Sort By Your Own Criteria](https://no-cache.hubspot.com/cta/default/37671/edc33fe8-9d87-477b-bf2f-07a33d3d2d24.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/edc33fe8-9d87-477b-bf2f-07a33d3d2d24) ![Jumping](https://info.c-loans.com/hs-fs/hubfs/Jumping.jpg?width=418&name=Jumping.jpg) Chapter 15:  One of the hardest Pro Forma Operating Statements that you will ever have to prepare is one where some of the tenants are triple-net tenants, and some of the tenants are full service tenants.  This situation occurs when a hot, brand new shopping center opens and leases out on a triple-net basis. Later, as the shopping center ages, new tenants will only sign if the lease is full service.  Here's how to handle it. [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/sample-partial-net-pro-forma-operating-statement](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/sample-partial-net-pro-forma-operating-statement) Chapter 16:  What is a Reserve for Replacement?  You're rushing to get a package out, and you know that you must include one; but how on earth do you compute a Reserve for Replacement? [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/reserves-for-replacement](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/reserves-for-replacement)   [![Free Commercial Loan Placement Kit](https://no-cache.hubspot.com/cta/default/37671/882eb54a-a8b4-4c38-a2ed-605338b6f07a.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/882eb54a-a8b4-4c38-a2ed-605338b6f07a)![Black hole](https://info.c-loans.com/hs-fs/hubfs/Black%20hole.jpg?width=411&name=Black%20hole.jpg) Chapter 17:  What on earth is a cap rate?  What do you do with it?  You've wondered about this for years, haven't you? [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/cap-rates](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/cap-rates) Chapter 18:  The Net-Worth-to-Loan-Size Ratio is an extremely important ratio in commercial real estate finance. [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/net-worth-to-loan-size-ratio](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/net-worth-to-loan-size-ratio)   [![Apply For a Commercial Loan to Blackburne & Sons](https://no-cache.hubspot.com/cta/default/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc) ![Grocery list](https://info.c-loans.com/hs-fs/hubfs/Grocery%20list.jpg?width=537&name=Grocery%20list.jpg)   Chapter 19:  Toxic contamination liability is a HUGE issue in commercial real estate finance.  What is a Level I toxic report?  What is a Level II? [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/toxic-liability](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/toxic-liability) Chapter 20:  This is one of the most important chapters of this Underwriting Manual, and it is a great primer on the subject of commercial construction loans. [https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/the-construction-loan-process](https://www.c-loans.com/knowledge-base/how-to-underwrite-commercial-loans/the-construction-loan-process) [![Fee Agreement and Fee Collection Course. Just $199.](https://no-cache.hubspot.com/cta/default/37671/b8c2bde4-6428-433c-85cd-dfd884ff4a2c.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/b8c2bde4-6428-433c-85cd-dfd884ff4a2c)   ![Fire extninguisher](https://info.c-loans.com/hs-fs/hubfs/Fire%20extninguisher.jpg?width=538&name=Fire%20extninguisher.jpg)   [![Franchise financing](https://no-cache.hubspot.com/cta/default/37671/505104e3-6949-4012-9306-045d6a5913f7.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/505104e3-6949-4012-9306-045d6a5913f7)   [![Nine-Hour Video Training Course How to Broker Commercial Loans](https://no-cache.hubspot.com/cta/default/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f)   [![Subscribe to the Commercial Loans and Fun Blog](https://no-cache.hubspot.com/cta/default/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc)       Topics: [commercial loan underwriting ratios](https://info.c-loans.com/topic/commercial-loan-underwriting-ratios) ### George Blackburne III Owner of C-Loans, Inc. ![george blackburne photo](https://info.c-loans.com/hs-fs/images/george-blackburne-photo.jpg?width=156&height=217&name=george-blackburne-photo.jpg) ### Subscribe via E-mail ### Connect with C-Loans ## [![Get the Latest Scoop on C-Loans Inc.](https://no-cache.hubspot.com/cta/default/37671/bacfb58b-143e-40d7-b126-33c182b5b90b.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/bacfb58b-143e-40d7-b126-33c182b5b90b) C-Loans.com® is sponsored by  C-Loans, Inc. — For more information, contact Tom Blackburne 555 University Ave., Suite 150, Sacramento, CA 95825 Telephone: (916) 338-3232 x 317 * Tom Blackburne in Indiana: (574) 210-6686 * Fax: (916) 338-2328 Real Estate Broker -- California Department of Real Estate -- License Number 01330173 Arizona Dept. of Financial Institutions – License Number 0909472 The Florida Mortgage Brokers License Number: 0708758 [Read our many client Success Stories](https://c-loans.com/mortgage-brokers-overview/success-stories/) » © 2025 C-Loans, Inc. 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