Commercial loan basics for multifam

[Joshua W Sommerfeld]

Hi folks -- I'm thinking about jumping into RE as a wealth diversification strategy, and trying to understand how the returns would compare to other alternative assets in my portfolio (private equity, hedge funds, etc.). Can someone please walk me through the basics on the typical parameters of a commercial RE loan for a multifamily property. What are the typical LTV, interest rate ranges, terms, balloon, interest only or P&I, etc. (I'm looking in Chicago, if that helps). At all the places I've modeled so far using a conventional mortgage with 25% down, there is basically $0 cash left if I use relatively conservative assumptions for repairs, management fees, etc. I feel like I must be doing something wrong. If I should actually be assuming a 10 year with balloon, interest only, at 4%, or something... that would be a game changer.

Thanks,

Josh