Average Commercial Interest Rates in August 2020

[Matthew Allen]

I'm potentially locking up a smaller apartment building this weekend, the seller is willing to carry the contract 30-year amortization, 5-year balloon, 5% interest, and 75 LTV. Thoughts? What are the going commercial rates at right now, all my props are residential and FHA (actually refinancing all of them now). Thanks in advance for you're advice/input.

[Charles Seaman]

@Matthew Allen If you have other financing options available, then 5% is way too much in the current environment.  I've seen rates as low as 2.70% on commercial mortgages for agency debt to acquire multifamily properties.  I've heard other people say that they've seen rates as low as 2.50% on commercial mortgages.  Even if you're investing in a smaller market, 3.60% to 3.75% should cover you if you want to be really conservative.  While seller financing is always a great option, it's definitely worth it for you to explore other financing options or to see if the seller is willing to negotiate the rate down.