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I'm about to close escrow on my first commercial multifamily property (>5 units) and I'm a bit surprised by some of the terms that are in my loan documents. Curious to get perspective from more seasoned investors / loan brokers about whether these are standard.
Background: The property is in California. The lender (Pacific Premier Bank) offered a rate (3.25%) that was 50 bps better than any other rate I got quoted at the time AND had favorable prepayment terms (3,2,1,1,1). Given that rates have increased, if I go back into the market for a new loan, I'm afraid I'll be looking at rates between 4.0-4.25% and will have worse prepayment terms. The borrower is an LLC that will own just this property, so the lender required that I provide a personal guarantee.
My concerns are listed below and I'm curious which of these are common for this type of loan and which ones truly are egregious and should be pushed back on.
1) My guarantee is unlimited in value. I would think it should be capped at the loan amount.
2) As guarantor, I am not only guaranteeing payment of the loan but also ALL other obligations of the LLC (such as credit card payments, other maintenance bills, etc)
3) Guarantee agreement seems to prohibit the sale or refinancing of my (the guarantor's) other assets/properties
4) The note says the lender can, after the 5 year fixed period, change the index to another index rate AND change the margin / spread to any number they choose. I still have an annual cap that limits the increase in rate within a given year to no more than 2.0%, but it seems ridiculous if they can change both the index and the margin.
5) I need to get the lender's written consent before taking distributions/dividends from the property's bank account (which is held at their bank).
...there are more, but I'll stop there for now.
If these really are as egregious as they seem to me, I'd also appreciate any suggestions on reasonable RE attorneys who are familiar with CA mortgage law and might have a reasonable shot at providing fast turnarounds on something like this. I need to fund this loan by month-end otherwise the loan approval will expire.
Thanks in advance!