Finance Options to buy a 4-plex

[Chi Sastry]

Hi BP- 

buying my 3rd multi-unit property. 

I’m putting a contract on a 4plex 

I’d like to understand which financing option is better:

Option 1 - Residential loan- 7.99%, 30 yrs, 25% down. 3 points at closing plus 2% closing cost.  monthly Mortgage is ~ 1800  Under my name. 


Option 2- Commercial loan. 7.75%, 20yrs, 20% down. 5 year balloon payment.  1% for closing. No points. 
monhtly mortgage is ~ 2100. Under LLC

Option 2 is 13K less for closing. But also lower cash flow every month. 


Any other suggestions on how to analyze the deal. I’d like to use the 13k to buy another property. But don’t like the 5/20 or the lower cash flow.

Thanks!!