1-4 Unit Commercial Mortgages

[Danté Belmonte]

Just did another Commercial Mortgage through my LLC on a two-family property. I do commercial mortgages on all of my buildings because it is in my LLC for liability purposes (as far as I know, it has to be a commercial mortgage when in an entity such as an LLC) . It seems that most Commercial Mortgages are ARM loans. Does anyone know if it is possible to get a fixed rate mortgage with a Commercial Loan for 20-30 years all in my LLC?

Thanks BP community!

[Greg Miller]

The big elephant in the room is the title transfer. Many investors (maybe myself included) get a 30 or 15 year fixed rate residential loan in our individual name and immediately transfer title at the closing table with a quitclaim deed. You may pay $400-500 for the title transfer but get to capitalize on the most favorable Fannie/Freddie backed residential loan terms. I’m in the low 3% range on a 15 year fixed with 3 points on a duplex I’m closing on in the next few weeks. Definitely consult with your own attorney for advice on your individual circumstances.

On the commercial side, yes they are variable rates but some local lenders (I have this exact loan with Empower) might lock for 10 years on a 15 year loan, 20 year amortization on very competitive rates. That way you are saving the costs of the title transfer. It is also flexible if you’re buying a package of properties or 5+ unit property that has to be bought commercially.

There are also some national lenders who offer asset based lending to LLC companies directly. One company specifically lends nationwide on 30 fixed rate loans in the 5% range. I believe only to 740+ credit scores, but there are a lot of great options out there.