Seeking advice: buying a 4 family as rental property
I've found a 4 family home (four small 1 bedroom apartments), brick building that appears to be in excellent condition, grounds are well maintained, no visible problems with the structure or interior of units.  

Purchase price would be 170k.  It comes fully rented, everyone is on a 1 year lease, the monthly rent roll is $3,100.  Taxes are $11,500/year.  It's zoned as commercial.

A local bank tells me that since it's commercial, I need 30% down (I can swing that).  They also say that the mortgage would reset every 5 years (instead of fixed for the term) and closing costs would be around 6,000 to 8,000.  

I'm not sure that paying 8k for a 110k mortgage makes sense, and not that happy that the interest rate wouldn't be fixed.  If I could scrape the cash together - maybe a loan against my 401k, or even a second mortgage on my primary residence - would it make better sense to do that, even at a higher rate, to avoid those closing costs?  Maybe form an LLC and loan myself the money?  

I have a couple of rental properties - one small coop apartment I own outright, and my house is a 2 family with rental income, so not a complete newbie, but this is my first attempt at expanding my slum lord empire - none of what I've done to this point was strictly investment property, and I would prefer to avoid mistakes.  Any advice is appreciated.
[{"id": "ckztft2", "text": "Call some more lenders. What this one is saying doesn't make sense. \n\nJust because the building is zoned commercial by local government doesn't mean it's subject to commercial lending. 1-4 family buildings still qualify as regular residential. You will pay a slight premium for it not being owner-occupied but nothing like the terms you have been offered. \n", "replies": [{"id": "cletvq4", "text": "I wonder if whatever program they are contemplating (FHA, FNMA, etc.) requires that the zoning be residential for these particular loans, just as one of their many underwriting criteria.  Does seem silly, though.", "replies": [], "depth": 2}], "depth": 1}, {"id": "cl1c8yn", "text": "4 family is still considered residential, but it will be strictly investment property since you won't live there. Each lender will look at the loan differently based on their underwriting requirements and location, I would suggest you speak to several other lenders before making your final decision. Regarding the 2nd mortgage on your primary home, i do think there are some closing expenses with that transaction too, borrowing against your 401K would be last option if you don't get better alternatives from other lenders. Good Luck.", "replies": [], "depth": 1}, {"id": "cl7e5sl", "text": "That sounds steep on closing costs, unless that includes NHD, appraisal, etc.. \n\nIf you try, I  think you can swing an FHA loan (10% down) on the 4-plex, or refi the 4 plex you own outright. ", "replies": [], "depth": 1}]