Alternatives to local bank loans for small commercial property

[Catherine Clare]

I have a commercial property that is currently leased for 3.5 more years NNN, with two more options of 5 years each. It is operating as a laundromat. Remaining loan of $153k 6.75% 5 year balloon over 20 years (15 years left). I just renewed after the first 5 years. Cash flow is slim. The loan is with a local bank in my small town and they want my personal finance records at every renewal.

Does it make sense to refinance to a different loan structure? I'm just learning about DSCR loans (not sure if you can do this on a commercial property), private lending, etc. Also considering a cash out refinance to purchase the next property. I'd have to get a lower interest rate on the cash out in order to keep the first property cash flow positive.

Interested in any thoughts and advice y'all have!

[Erik Estrada]

Quote from @Catherine Clare:

I have a commercial property that is currently leased for 3.5 more years NNN, with two more options of 5 years each. It is operating as a laundromat. Remaining loan of $153k 6.75% 5 year balloon over 20 years (15 years left). I just renewed after the first 5 years. Cash flow is slim. The loan is with a local bank in my small town and they want my personal finance records at every renewal.

Does it make sense to refinance to a different loan structure? I'm just learning about DSCR loans (not sure if you can do this on a commercial property), private lending, etc. Also considering a cash out refinance to purchase the next property. I'd have to get a lower interest rate on the cash out in order to keep the first property cash flow positive.

Interested in any thoughts and advice y'all have!

 Hey Catherine, 

It will be tough to find similar terms on a commercial property with a DSCR loan. I am seeing these roughly in the high 7s to 11% depending on the LTV & PPP structure.

A local bank or credit union will be a best fit for this scenario