Commercial Loan Terms Analysis help for Multifamily deal
In the process of purchasing a small commercial residential 12 unit multifamily deal. I'm pretty well versed on the non commercial residential side but this is my first commercial residential deal and i could really use help from the gurus to explain whether these terms make sense.
Terms:
Purchase price: $299,000
Loan Amount: $224,250
Loan to value: 75%
Term: 20 year with re-pricing every 5 yrs based on 5 yr treasury + 3.50 margin
Amortization: 20 year
Fee: $1,125
Rate: 5.50% for 1st five years prior to 1st re-pricing.
Questions:
1. How do i analyze the re-pricing every 5 years, is this similar to a 5 yr ARM?
2. What exactly is the 3.5 margin?
3. Since this is the first time i'm doing this, what questions should i ask for clarification that i'm sure i'm missing?