Conventional or Commercial Loan

[Dave Garlick]

I am in the process of reviewing 2 duplexes owned by the same landlord for my first buy and hold deal. I originally went to a local bank to get preapproved and that came back fine for the dollar amount. When I asked if he could bundle them into a single loan he said he couldn't bundle them but his commercial lender could. I've read a little about commercial lending but I'm not all the well versed on the pro's and cons.

If I remember properly, commercial loans are usually short term loans of 5 to 10 years with a balloon payment. Is there any advantage to going this route given the fact I will probably have to refinance before the balloon is due and probably at a higher interest rate at that time?

Are there any other things I should consider when looking at a commercial loan vs 2 conventional loans? 

Dave Garlick

[Steve Vaughan]

I'd definitely stay in the residential universe if you can.  I punched all 3 of my commercial loans in the face and paid them off.  They don't bother me for my financials anymore.

I've purchased more than one from the same seller before. He seller-financed one and I got a loan for the other.  We could play with prices and terms.  It was fun and profitable.  

See if they will carry one for you @Dave Garlick!