Commercial Loans 101 Discussion

[Julie Fishman]

Does anyone have any questions about how commercial loans work? 

[Joel Owens]

Yeah with my clients on commercial transactions we do 7 to 10 year fixed. No 5's unless it's a turn around project or lease up where the value is substantially increased so even if interest rates rise a lot the high cash flow still covers it.

I like 7 to 10 years because cycles generally happen in asset classes but not generally in 5 year spans. Banks like to sell that 3 to 5 crap but most buyers do not want it. I have had more luck with credit unions lately.