Financing Terms for 10 Property Portfolio

[Andrew West]

I have a ten property portfolio under contract, nine single family homes and one duplex.

This will be my first time using commercial financing and I'm curious how good the terms are and what my options are.

The lenders I have been working with have all been quoting me similar terms:

5/1 ARM, 6.5%, 10 year term, 25 year amortization.

What are your thoughts on these terms? Are they negotiable, and are there other options I should be looking in to?

[Benjamin Aaker]

Your terms right now are fairly nice, in my opinion. I don't usually recommend shopping around a whole lot. At a point, the differences are usually small and you will want to build a relationship with a bank. Adjustable rate is probably a good thing right now, if you expect rates to go down. Better than locking in a 6.5% in my opinion. The 10 year term is fine. This would have been great with a fixed rate last year and isn't so important now, unless you have a big prepayment penalty. Make sure you look into that. 25 year am is nice, many are offering only 20 years right now.
And yes, you can negotiate on terms. I always recommend to go in with your requested terms first, though you are after that point right now.