Refi Loan advice needed - due to reset and unsure what to do
Hello BP
Seeking advice on what to do with my LLC rental property loans, which are due to reset in the next few years.
Currently all are 5 year ARM no balloon and 30 year amortization. The reset rate for next 5 year term is 5-yr Treasury + 3% with ceiling of 8-9% (depending on loan). Each property cash flows positive $800-1200 per month, and they will payoff at current rate in 10-13 years applying all profit to loan principal.
Here is the roster:
$400k VALUE $270k loan @ 4.7 until 9/19
$360k VALUE $250k loan @ 3.8 until 5/21
$400k VALUE $275k loan @ 4.17 until 1/1/21
$360k VALUE $175k loan @ 4.56 until 2/1/20
These are investment properties and goal is to take cashflow in 10-12 years/also buying more each year.
My experience thusfar:
Big banks can't do anything with small commercial loans. One would wrap into a 7 yr arm @5.5% to start, IF I transferred over what assets I could for 1% AUM fee - no thanks.
Small local banks have been most flexible, but 3 mostly advise just letting the rates reset as they come up, as the current rates are pretty good - assuming 0.25% rate bumps I guess I'm looking at 5-6% loan rates for the next 5 year term.
At this point, we are inclined to just let them ride and reset for the next 5-year term.
WWYD/Thanks in advance for any advice!