Consolidating rental loans advice
I currently have 7 properties with individual commercial loans on them totaling $192k. They are all 1-2 years into the loans.
5.5% variable
10 year amortization
5 year balloons.
I have been speaking with another local bank who offered to consolidate all the loans into one loan amortized over 15 years, 5% fixed 5 year balloons. Doing so would increase my cash flow by $700/month which of course to me sounded great! A real estate attorney said he would charge me between $1000-$1500 for his fee, plus I would assume I would have to pay for title insurance again(which totaled $1034 on these 7 properties) plus have to pay a 1% origination fee of $1920. I am guessing total closing costs around $4500-$5000. With the increase in cash flow it would take me around 7 months to get my money back.
My questions are:
Has anyone out there consolidated loans like this before?
Is it possible to ask for a discount on the title insurance(7 properties at one time)?
Obviously the downside is the out of pocket expense for closing costs and the properties not being paid off for 15 years vs 10 years. The bank also said that if I wanted to sell a property they would break it off and modify the loan(not sure how they figure that, I need to ask some clarifying questions). I really would like to hear your opinions on this!
Thanks!
-Bill