I'm in Central GA and own three rental properties I've paid cash for. I'm looking to expand my business and have spent the past few days talking with commercial lenders at banks. All are confident they can provide me a product, but I have a bit of sticker shock at the rates (5-7%) and terms (no more than 20 years amortization, most with a balloon payment at 5 years). I guess it just bugs me that I have to personally guarantee it (my personal credit is excellent), but they will still treat it completely like a business loan with business terms. I do understand their viewpoint, I have been in business less than two years and am showing a loss on my first tax return (but rent is rolling in and we're doing great, we're just putting cash back into the business).
Do portfolio lenders typically offer terms that are more like a conventional mortgage with similar rates?
Additionally, does anyone have the name of portfolio lenders in Georgia I can call?
@Amy E. What you need is a Fannie Mae direct lender that does not have internal restrictions of 4 loans per borrower. Fannie Mae allows for up to 10 loan per borrower. You are not where close to that, so you don't need to jump to a portfolio/commercial lender.
Mortgage Banker, VA Loan Specialist
National Lender, Federal NMLS# 1374243
Should have mentioned, all three titles are in the name of an LLC.
Hi @Amy E. given that you hold title in your LLC, the terms you outlined are in line with what I see from portfolio lenders. The 20 year amortization seems to be standard and the rates seem to fall in the conforming + 1.5 to 2% range. The 5 year balloon seems to vary from lender to lender.