Questions about Commercial Lending

[Rob Bianco]

I'm trying to get into multi-family investing but I have some questions about commercial lending since I've never had this type of loan before.

For instance, if I am interested in a 25-unit apartment complex and have acquired a commercial loan to obtain the property with a 5 year balloon, is it relatively common for investors to refinance the commercial loan if they aren't ready to make the balloon payment? In this hypothetical, let's say I renovate every unit with the intention of flipping the complex, but couldn't find a buyer before the loan was due - would it then be prudent to refinance? Would that even be an option that late in the game? 

What if I do find a buyer and sell the unit before the end of my loan agreement (which might include a pre-payment penalty)? Would I then be subject to penalization?

Alternatively, if the apartment complex is brand new and doesn't need renovation and there is no opportunity to add value to the property would a lender allow me to refinance? 

Please correct me if I'm wrong, but are investors who intend to hold onto properties (vs flipping them) just refinancing, refinancing, refinancing indefinitely? At what point would it make sense to have full equity in a large property, if ever...