Commerical loan for 10 unit multi family?

Question

I'm looking at a 10 unit apartment building in WA that might be a good deal. What exactly does the financing process for commercial look like vs residential? I've done residential up to this point but I hear that anything over four units is commercial. Does that entail a higher interest rate, if so, what are the typical rates? Higher closing costs, if so, by how much typically? I take it for commercial the evaluate the rents of the property not just my income.

Chris Cambridge · Answer

The biggest factor in the financing is the cash flow. Get the actual numbers. The down payment is usually 25-35%. You would also want to show reserves after the loan is closed.

Asking about rates is always premature as loan types really vary. Risk influences rates as well as lender's target returns.

Not sure how to address all closing as states have different factors. When addressing the loan costs there will be a few items to cover but it depends on lender/loan type. If you want a general answer expect it to be more just to be prepared to price it in.

Property income does come first.

Account Closed · Answer

Jack,

Got some investors there. And a 600+ list of nation-wide investors.

Heck, it might work. I don't know.

Let me know

It's being changed soon, been commercial for 3 years. Got yaked at on here for having the wrong web extension. He was right. Whatever...

Rob