Would you rather pay down commercial property, or finance it out?

[Tom Henderson]

Team, 

Background -- 1 year ago, I purchased a convenience store, and converted to apartments. Also renovated the upstairs units.. It is now time to refinance the original 1-year note, and pay-out the guys who helped me seller finance, too... If you were refinancing a similar commercial property today, how would you approach this scenario -- 

Apartment in Minneapolis... 

-- 5 year note @ 5.5%, 25 year am ....or....

-- 10 year note @ 6.0, 20 year am

Some thoughts going thru my head -- Goal is to pay this one down ... 

-- how fast will interest rates increase in time? Is it better to lock in and pay the additional .5 points 

-- Would you rather go with the short term finance option, keep the cashflow and pay down principal on your own time frame? 

Appreciate your thoughts!!

Tom

[Harjeet Bhatti]

I would say take 10 year note and pay points to lower the interest rate because you want to keep this property. Make sure you recover  point in 3 years.