My first commercial loan - is this a good deal?

[Jeff O'Neal]

I'm pursuing the purchase of my first small apartment building (6-units), and I received a commercial loan commitment from the local branch of a mid-sized regional bank.  The details of the loan are as follows:

• $250,000 purchase price
• 80% LTV (lessor of the purchase price or the appraisal)
• 20 year term
• 4.75% rate fixed for five years, adjusted at each 5 year anniversary to the current 5 year Libor Swap plus 300 basis points
• 0.5% origination fee
• Operating checking account maintained with lender

Does this sound like a decent loan?  Is the 5-year adjustment typical?  Should I try to negotiate the origination fee, or is it reasonable?

Thanks in advance for your input!

[Brian Garrett]

I can't add much value here other than telling you that all of the commercial lenders I've talked to have higher rates than 4.75% so that part of the deal sounds good. Not sure about the rest of the terms though.