We are about to begin the refi process to get out of hard money and into commercial loan for a small 6 unit complex. I would say the loan amount would be 350k but can't be more than 400k at best. The broker I worked with is helping with it and I met him and the VP of the bank at the property today to get input. I asked about fees and the bank said anywhere from 1.5-2% for all the costs at closing (legal, appraisal, etc). Then I asked the broker his fees and he said 2% since it's a smaller loan and they do 1% for larger. My husband thinks it's alot of money. No argument there. But isn't that the standard in fees? Nobody is gonna work for free. These people have pretty good connections and I do feel like their word weighs alot to the lender. Plus, they pretty much do all the work/communication. I just supplied paperwork to them and they got us the hard money loan. Before I even met the VP of the bank he already knew about us and our financial picture because our broker already sent our files over. It's alot of money. But I feel like we are getting what we need out of it. Any thoughts? Am I just too nice....??
That's not a lot of money at all on a refinance from a hard money loan to a 6 unit (commercial money is not cheap).
Couple of points is pretty standard on small commercial loans.
That's pretty typical. Anything over 4 units that is a smaller loan amount tends to be difficult to place as lenders frequently think of 1-4 units and 5+ units as two different buckets, and resultantly expect higher values/loan amounts for the latter 5+ unit bucket.
I think that this sounds pretty reasonable given it is a commercial loan and is a multi-family (5+ unit) property. You may be able to find a lender with slightly lower fees. You will typically find on a commercial loan that all in for fees (points, appraisal fee, underwriting fee, legal fees, doc prep fee, wire fee, etc.) you will be looking at 3-5% of the loan amount so this is right in line with that.