Commercial loan terms in Jan, 2024?

[CJ M.]

Hello,

Full transparency :) I'm 'green' when it comes to commercial real estate as I typically invest in single family and duplexes. Anyway, I came across a 12-unit that I wanted to run some rough numbers on. From what I can tell, it's a 7.4% Cap in a solid B/B+ neighborhood (not sure what the avg cap is in the area yet though). 

Problem is, when I add in debt service (assuming the loan terms I see on single family homes), it's cashflow is negative. What are you all seeing for commercial loan terms (%, LTV, Closing, etc.)? Before I tie up any lenders time/realtors time I'm just trying to get some practice running multi-unit numbers and see if this one is worth pursuing further. Purchase price=$750,000, fully occupied/mostly long-term tenants, under-market rents, no deferred maintenance, very nice 1/1 units (lofts), solid B/B+ area.

Thank you in advance for any feedback/advice.

[Alex Church]

Rates are typically always higher for 5+ units and commercial properties. Most of the multi-family properties that my clients have asked about do not have a good cash flow right now from what I've been seeing. To be honest, I would stick with 1-4 units until rates go down more.