Seller Financing down payment

[Jaden Zubal]

Hi Everyone,

I am currently looking at a deal for a 14 unit complex that has a seller financed note and the current owner is offering an additional seller finance to close the deal. He is asking for 6% interest on his deal, and I would just take over the original seller finance that holds a 4% interest rate. The 6% would include about 60% of the total asking price, and the 4% note would include around 35% of the total price, with a 5% down payment. 

My question is, would it be advantageous to look at a commercial loan, rather than take the 6% seller finance piece? And is it possible to finance that part without additional down due to the bank only financing roughly 60% of the deal?

Thanks in advance for any feedback you can provide!

[Steve Vaughan]

Even if a commercial lender could do 5% for you (doubtful) the appraisal fee of $3500, lenders title insurance and escrow costs would put you over 6% in real dollars. And that's if they don't have an origination fee, underwriting, doc prep, funding fee, etc.

 Bonus- they will bother you every year for your financials and have a 5yr rate adjust and call or balloon.  Avoid commercial loans if you can. I got tired of my 3 and paid them off or refinanced with a private  lender at 6% fixed (the bank was 5.75% 5/5) on a 10yr am and couldn't be happier.