What size deal are you trying to do? I’ve never done anything $20MM+, but in my experience up to a few million there really isn’t a big difference. Speak to several lenders, get their terms, come up with the money, close. I’m oversimplifying, to an extent, but it’s really not that complicated, especially when you’re adequately capitalized.
Commercial and residential loans function in different ways for different purposes
Residential loans are used to purchase residential property (as you probably surmised). Residential properties are typically between 1 - 4 units.
The interest rate is fixed and the loan is amortized over longer periods of time. The most common being a 30 year amortization period.
Commercial loans, as you probably guessed again, are used to purchase commercial property. Generally speaking, you will need a commercial loan to purchase properties 5 units and up.
The interest rate on commercial mortgages will usually be higher than residential loans. Another key difference is the amortization schedule is usually shorter. Most of the time it is between 5 - 10 years and sometimes 20 years.
However, the payment schedule or amortization period can be spread out to a longer period of time. For example, the loan can be for 10 years but the amortization period can be set for 30 years.
Good luck and PM me if you have any questions!
@Clifton Young , here's a few thoughts:
1) They will be looking at your personal financial statement and the merits of the deal.
2) My first deal was commercial (4-office building). It was vacant at the time, but my accounting practice was going to be occupying the largest space and paying enough in rent to cover most expenses.
3) Education and networking will be key to making a good purchase.
4) Check out Peter Harris of Commercial Property Advisors on YT for a ton of content on commercial deals.
Hope this helps,