Accountant · Omaha, NE · Member since 2015 · 9 posts · 2 votes
Hi BP,
I would like to do a survey of investors who have more than 10 properties and have bank financing. What are the terms of your loans? The banks/credit unions that I have been talking to in Omaha, Nebraska on the commercial lending side are typically providing terms of 5 year fixed with amortizations between 15-25 years. What terms are you getting?
3.25 for 30 yr am 5 year fix. But it makes more sense to team up with other investors and go big. SFH is not scaleable and if you do get over the 5 k per month level. Well you just created a JOB.
The last 3 I financed with a local bank were 15 yr fixed, 4.5%. You have to find the right bank/banker that doesn't see it as a commercial loan, just a portfolio loan. I was running into the same offensive terms until I found the right fit - one bank wanted like 6% rate, 10 yrs fully amortizing.
3.25 for 30 yr am 5 year fix. But it makes more sense to team up with other investors and go big. SFH is not scaleable and if you do get over the 5 k per month level. Well you just created a JOB.
Wow! Those are pretty good terms. I have been getting 5% @ 25 Year Amortization with 5 year balloon. I have been able to get 80% LTV on some of them instead of 75%. Makes a big difference.
You should know (or find out) what the bank wants. One-of deals may cost a lot in bad terms. More times than not, you can pool X properties in a tranche and meet lending minimums ... kind of like builders do with new developments, with or without release clauses, and get 'reasonable' terms. You won't be seeing terms like federally subsidized (Fannie Mae) mortgages, though.
@Dan Frank it is a bank local to Denver, looks like you are in the cities. If you are less than 10 Fannie has the best terms. If more, you might try @Kim Burke with leader1, she has referrals for more than 10.
Keep in mind I posted the rate about 3 months ago, rates are up a little since then.
Local banks are all about relationships (meaning your deposits), terms become more favorable when they have your banking business.
@Kyle Doney correct FirstBank. I am getting ready to finance another with them. No issue to title in entity, fairly easy to work with and doesn't report to credit.
@Travis Sperr Nice. I've used them twice, but they hook me on a 7/30. 15 fixed is better typically, I just didn't have it presented as an option. I'll probably 1031 out before 7 anyway, so in the meantime we have good cashflow.