Investor · Madison, WI · Member since 2012 · 242 posts · 61 votes
Does anyone who works with a portfolio lender and has their rental properties in a LLC have a fixed rate mortgage? Or are ARM's the only way that banks will finance buy and hold rentals in a LLC? My Realtor just mentioned as we were looking at a duplex she had another client that was doing rental properties in fixed rates as an LLC.
Has anyone ever done creative financing with a portfolio lender like 1/2 ARM and 1/2 in like a 15 year fixed or anything?
Commercial lenders, i.e. local and regional banks do not offer fully amortizing fixed rate loans beyond really 7 years. More common would be 3 or 5 year fixed loans especially under 2MM. They will amortize over 20 years however will only fix the rate for up to 7 years. I've seen amortization up to 25 years however it is less common. 7 year fixed rates are also uncommon. Some markets are ballon markets and some markets will fully amortize but float/adjust after the fixed rate period.
Is it a bank and/or a true balance sheet lender? Lending is definitely driven by the location and market however I haven't heard of 15 year fully amortized fixed rate commercial loans from a local or regional bank. I would imagine the rate is a few hundred basis points higher because of this. Either way that is a great resource to have!
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
A local bank. Only has branches here and a few in CA. Rates for 15 year investor loans are about the same as a 30 year fixed conventional. They do keep the loans in house, AFAIK. I don't have any loans from them but a friend has four and another has a couple of dozen. IDK what they're doing for larger properties. I need to touch base with them, though, so I'll update the thread if there's been any changes.
The FDIC Institution Directory isn't the easiest tool to use, but it has a wealth of data about banks. If you can master its search function you can find smaller banks in your area that have RE loans on their books. Those are good candidates to call.