Should we buy a multifamily with an adjustable rate mortgage?

[Nick Bleser]

Hi folks!

There is a property available in my town that is 3-4plex's. It's listed for $600,000 and could bring in $84,000 in gross income. After our best estimation with the info we have available we believe it could cash flow bringing in $1,500 net a month. 

So far I've talked to 2 smaller banks and because it's more than 5 units it's considered commercial. Since it's commercial I can't get a fixed rate. Is this the case with all lenders? 

I recently listened to "The Real Estate Guys" and they made a great comment about avoiding adjustable interest rates when approaching a downturn in the market and frankly I want a fixed rate. Can I find a 20-30 year fixed loan on a property this size?

[John Knisely]

Nick, my 2 cents on your question from a buy and hold perspective...no, you should avoid ARMs if you can. The fixed interest rate mortgage (especially with the rates we are still seeing these days) is one of the biggest boons of investing.

I'll let someone with more banking experience tackle your other questions.