Commercial loan advice

[Nicholas J.]

I’ve been calling around and talking to different local community banks about obtaining a commercial loan for a multi family purchase, and ran across a bank that only requires 10% down. Obviously numbers on a purchase have to work with only 10% down, what are the negatives to going that route versus the 20-25% all the other banks require? Thank you!

[Patrick Liska]

Nicholas,

your payments per month will be more,more to pay off and your interest may be slightly higher than if you put more down but that does not matter if the numbers work and you are still covered to where you are not paying anything out of pocket and you are making enough to cover all your expenses. I do not see a downside to being more leveraged as @Andrew Kerr mentioned, that is more of a security blanket to keep you from getting sued, no money in the property. they may require more documentation, personal guarantee and maybe a lien on another property to help protect their interest. I think it is a good deal if the numbers work for you.