Typical fees and financing for multi-family apartments

[Tony Castronovo]

First, I am learning that "typical" and "commercial" should not be said in the same sentence.  But a couple questions for those with experience in multi-family apartment complexes.

First, what should I expect to pay for an environmental survey?

What about financing?  I have a couple of lenders I am working with but want an unbiased opinion on what a good structure looks like.  I know everyone's situation is different.  For me, I am trying to minimize risk by saving some of my cash for operating capital.  My planned exit strategy is likely to be a refi in a few years to hopefully pull money out to fund the next one.  If it's too hard to say what is "typical" then please respond with what you think a good set of terms would look like.  Here is what I am thinking:

• Term:  5 years with 6 months of interest only (is 7-10 years common/achievable without getting hammered on rate)?
• Recourse loan (pretty common for your first deal?)
• Origination:  1% (is less than 1% common?)
• Amortization:  25 years 
• No pre-payment penalty
• 80% LTV

Anything else I should consider?

[Matt H.]

@Michael Le agreed on Cash for BRRR. I personally don't like a bridge loans because of the rates/fees, but I get that. 3 years with a 3 year pre pay works right for me with my business model. I also acknowledge I live in a lower cap rate / higher appreciation type locale so that can tweak the strategy slightly. But on the refi in a downturn point I want to make clear I believe in short term fixed interest rate periods, but not short term loans. 95% of my loans are 30 year loans and I won't take a balloon less than 10.

@Scott Skinger I'm self taught. I'm a R.E. Broker by trade but in 2005 I got annoyed with some mortgage brokers being worthless and decided to do loans myself. I basically financed almost every residential deal for myself and clients through 2014. I'm done with that now but I learned quite a bit. When I don't know something I just look it up from reputable sources online and also quite a few of my college roommates work in finance and can get answers on things like Libor nuances for example. Most people don't even know what their margin/index is after the fixed period, that's a huge part of any loan.

Get a bunch of quotes and you can just ask me and I'll let you know my opinion, if you think it is valuable. 

I'd also note the rich get richer. The best loans, especially in commercial, are offered to guys who don't need them as much. So when starting out sometimes just getting the loan is winning the battle.

Matt