Question for commercial lenders/brokers

[Travis Salley]

Hey there, Right now I have about 50k in equity on my rental. I am trying to save up another 50k within a year or so. I would like to sell my property and put 100k down on my first apartment building for around 1,000,000. My question is is this a realistic goal? It looks like many commercial loans require 20 percent down, but I have seen some for 10 percent. Any advice or things to think about would be greatly appreciated. Thanks!

[David Friedman]

Hello Travis, if the apartment complex is more than 4 units and this is your first commercial property with no other commercial properties to collateralize the loan, then you will most likely need 20% down. Realistically, most commercial banks will actually want 25% to 30% down for someone buying commercial property for their first time.