I’m in a bit of situation.

A few months ago, I made a deposit with a portfolio lender. The idea was that they would finance the properties after I purchased with cash (delayed financing) at a 6.25% interest rate and 25 year amortization.

Somewhere along the way, I had idea that it was 25 year amortization AND terms. 

Apparently those are 5-year balloon notes 😅

Too little info too late, I have already closed the properties with cash. 

I understand this is partly my fault as I should have asked for the term sheet sooner, but just going through the text messages with the loan officers, that was never mentioned by them until after I closed on the properties with cash.

I can remove the deposit from the bank, but I’m still stuck holding the properties with cash and now I’m scrambling to get them financed on 30 year notes. 5-year notes go against my entire “boring, slow, repeatable, stable” investing philosophy. 

One of the properties may be conducive to 5-year terms, so I'm still halfway considering it for that one because I planned the refinance around year-5 anyways. But the other one, not so much. I'd be willing to lax my principles a bit for the right property (this one is planned to be a "slow-BRRRR".

Anyways, now I’m shopping around for 30-year term financing, but my options are limited due to lenders having a max cash out limit.

I found some conventional secondary market loan products for around 7.25% interest but they would require 70% LTV. And I would have to deed the property to myself from my LLC first. I'd close the loan in my name and then deed the property back to myself LLC (fingers crossed the due on sale contingency isn't triggered).

It's a whole mess. I have two properties purchased with cash. I'm scrambling to finance them on 30-year terms, but the interest rate is higher than my underwriting and the commercial products I've come across are all either 5-year balloons or have a max cash-out threshold (lower LTV).

Fannie Mae loans seem like the best option. If I’m comparing my portfolio lenders product it looks like this:

Fannie Mae loan:

30-year term/amortization

7.25% interest rate

70% LTV

Portfolio loan :

25-year amortization

5-year term

6.25% interest rate

80% LTV

It's not a huge difference on paper and the properties still cash flow. But my IRR takes a hit due to the lower LTV and higher interest rate (however, the 30 year amortization helps a bit).

Thoughts? Concerns?