Commercial vs Conventional Loan for a Quadplex

[Michael Hooper]

I've got a contract on a quadplex for $127,000, and now I'm looking for financing. I've got 2 options so far:

1) Conventional loan - 30 year fixed rate @ 4.75% & 25% down payment

2) Commercial loan - 5 year fixed rate @ 4.75% (amortized over 30 years / converts to variable rate after 5 years) & 20% down payment.

The idea of a 5 year fixed rate that become variable scares me a little, but only having to put 20% is very appealing. I've got about 150K in cash that I'm wanting to leverage to get rental properties, so I'll still have money to invest after either way, but obviously, I can get more properties if I do the commercial loans. 

Also, are there any other differences that I may be unaware of between commercial and conventional? On question I've had is, are closing costs the same? But there may be more I need to consider as well.

Thanks