Financing properties through banks

[Joshua Walker]

I'm running into some unexpected terms and rates trying to finance my first rental property through banks and want to get opinions and input from other here. I'm ready to purchase my first rental property from another landlord. I've ran the numbers and everything seems good. It should cashflow about $300 a month. The problem I having is that the banks that I spoke to are mostly all wanting to do a 15 year ARM type loan. Once bank will do a 20 year loan.

A few details about the purchase: Purchase price is $100K, I'm wanting to put 20% down. So I would be borrowing $80K. The house appraised for $100K and the current tenant has been there for over a year. She has no plans of leaving anytime soon. I'm purchasing it through a newly created LLC, so my personal credit score is a factor. My current credit rating is excellent, so no problem there.

The banks are telling me these are the longest loans they can make on an 80K loan. Do any of you have experience in this and what is normal for commercial loans for rental properties. I have been doing all of my analysis using 30 year terms, so naturally this changes my ROI significantly.