Bank financing proposal - your opinion
Hi all. First time MF investor. 18 units, (6 duplex 2 tri), $810k purchase price, $120k cash down payment, cashflow after all expense and reserve and project note payment is $1600 per month.
Bank to finance $690k. Offering 5 year fixed at 5.25%, years 6 through 10 float at WSJ prime plus 1.5%, Balloon end of year 10. Recourse loan with personal guarantee.
Positive - they are letting me in at 15%, no prepayment penalty, i am a first timer with no self-history although have managed for others, i think i could sell it for 950k or so as is and get cashflow to 2500 per month in a year.
Negative - prime plus 1.5% is much higher than what I am used to getting for clients.
Prime plus 1.5% might be a deal breaker in my mind. Am I being unreasonable?