Conventional vs Commercial Loans

[Grant Lovelady]

Hey everyone,

My name is Grant and I am a new investor in the Houston, TX area. I have been on BP for several years but have finally gotten to a place financially that I am ready to invest in my first deal.

My question is about conventional vs commercial loans. I recently got approved by a local credit union for a commercial loan. This credit union will lend up to 80% of the lesser between sales price and appraisal and at most be amortized over 25 years with 5 year balloons at 5.75% interest currently. The main benefit of this particular credit union is they will lend the 80% of whatever is on the county's website for the property value sight-unseen (in their particular county). In my opinion, the last part seems pretty valuable for any deal I get for less than what is on the county website.

For a newbie looking at SFR to start, does this sound about right as far as lending terms? Should I shop other lenders and is there a way to get a fixed conventional loan on a house I do not plan living in?

These questions might have been answered already so anyone that can point me in the right direction would be a big help. Thank you!