30 year multi-family loans

4 Replies

I have the opportunity to buy a apartment complex for $1,500,000. The broker said he had a commercial banker that would give the following deal: 10 yr fixed/30 yr amm- 80% LTV at 4.65%.

I have over 50 units, but they are all on a 15 year amortization. Does anyone have experience with 30 year amortization loans on larger projects such as this one. Is that wise? The excess cash flow will be over $10,000 per month.


What is your concern with the 30 yr am?  As you already realize, this will lower your payment and increase your cash flow.  You can always choose to pay more towards principal (as long as you don't trigger a PPP) but you don't have to.  It gives you more flexibility and greater cash flow.  Win win.

Also, you might find better rates than what you're listing above...


I'm also not sure about the loan... that is to say are they giving you a 10 year fixed rate, then a 30 yr ARM for a total of 40 years, or are they giving you a 30 year amortization and a balloon in 10 years with a fixed rate. There is a HUGE difference between the two, and it's not clear to me which you mean.

If it's an ARM, then watch not only the yield maintenance on it, but also the negative amortization. They give you a fixed payment, but the interest rate goes up. The difference is usually added to principle.

Good Luck,


Hey Guys,

Thank you for your response. It is a 10 year balloon/30 year amm. Sorry for the confusion. Here is a little more info:

I currently on two 16 unit complexes in a college town. They generate enough revenue to pay out on a 15 year amm (Currently in year 4- 12 years left. Total debt is $800,000.

I have the opportunity to purchase 44 more units for $1,500,000. The lender has agreed to use the equity in the other two complexes, so we will have a total loan amount of 2,300,000.

This is my first time considering a 30 year amm. I am 32 years old, and we currently don't use any of the real estate income day to day. I just don't want to make a bad decision and regret it down the road due to interest rate risk/downturn/etc.

Thanks again

@Jeff Overstreet use excess cash flow to pay down principle. Ideally you would not have to expose your current assets but definitely a "first world problem" congrats :) 

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