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Investment Properties: Commercial vs. Residential

July 15, 2015

There are big differences between commercial apartment properties and residential investment properties. You could say it’s somewhat like two different planets. People new to the commercial apartment world need to understand the differences before getting involved. Before we continue, it’s important to know that commercial apartment properties are also known as multifamily properties.

First, there is one particular key distinction to keep in mind. A residential investment property has 1 to 4 units. A commercial apartment property is defined as having 5 or more units.

Second, another distinction, actually a major one is that multifamily loan rates work pretty much opposite to residential loan rates. For multifamily properties, the higher the number of years fixed, generally the higher the rate. For residential properties, the higher the number of years fixed, generally the lower the rate.

So, a 30 year fixed multifamily loan will give you a high rate, and a 5 year fixed multifamily loan will give you a considerably lower rate. Whereas, a 30 year fixed  residential property will generally have a lower rate than a 10 year fixed residential property.

A third difference is that a commercial apartment rates are considerably higher than residential property rates.

A fourth distinction is the number of years fixed for a multifamily property is typically 3, 5, 7 or 10 years. Whereas, the residential property fixed year period is generally 15 or 30 years.

We have an A+ Better Business Bureau Rating at and Business Loan Store. This is because we quote fairly, are experienced, and have other good habits of business practice.

Contact us to see if you qualify for our best multifamily, commercial, or bridge loan rates and terms. Keep in mind that one of our specialties is commercial bridge lending. Also, contact us if you would like to discuss your particular commercial lending needs, or if you have questions. Call 214-695-7310 or send an email to

To discover more about our loan products as well as rates and terms, see our loan programs page.

Bruce Painter, Director of Marketing, Business Loan Store