Investor · Friendswood, TX · Member since 2016 · 3 posts · 1 vote
Please excuse my first post without doing a member intro.
I currently lease space in a retail strip center. I lease 21% of the building. The owner wants to sell. Owner wants around $5M for the buiulding. Waiting on appraisal, but I think the owner value is correct. The rent rolls, payment history, and other tenants are good. The building is in good condition, about 10 years old, tilt wall construction in Texas. I'm in the medical field and can invest $3.75M cash right now. I want to avoid a balloon note and would prefer to do a straight fixed rate, 5 to 7 year loan to payoff the $1.25M and own the building free and clear. The cash flow can support a straight note. Is a straight note possible? Or, are the bankers only going to do balloon notes? Please forgive me if my finance lingo is poor.
Investor · Houston, TX · Member since 2016 · 1 post · 0 votes
10y
I had talked with Prosperity Bank (in Houston) a while back that would do a 7 year loan with a 30 year amortization. While it has a balloon at the end, but they typically just refinance the loan for another 7 years at a new rate.
Investor · Greenville, SC · Member since 2012 · 269 posts · 187 votes
10y
If the numbers work like you are suggesting then I am sure you can find a lender who will do that deal. 25% LTV is a safe investment for a lender. I would start calling around and talking to some commercial lenders to get the ball rolling.
Investor · Friendswood, TX · Member since 2016 · 3 posts · 1 vote
10y
Thanks Travis and Paul. I've contacted three banks so far. They seem perplexed when I ask for a straight loan with out the balloon payment. I would like to suck up 5-7 years for large monthly payments to just payoff the principle and be done. I can't sleep at night thinking of all the interest being flushed down the drain on a balloon note.