Making a plan to handle a balloon payment

[Joe Ebanks]

hi all, I'm looking for advice from the seasoned veterans here. Ive had problems finding a long term mortgage for a 24 unit i am ingerested in. 

I just spoke with a person who thinks they can help me. They will finance it with a 7 year balloon payment. Is this how most people do it? She spoke of tax strategies to minimize penalties at sale. And also refinancing as the property was proven stablized.

I have never owned a multifamily building ans was really looking forward to it. However the balloon payment is pretty scary to me. Id like to hear from people who have experience. 

My plan for the investment is going to be a 10-15 year hold as long as it is going smoothly. However it wouldnt be unreasonable to put it back on thr market after 4 years and sell. But that balloon payment is quite scary.

[Casey Mericle]

One thing I've found helpful is to discuss what happens if the balloon can't be paid on time.  The lender will expect you to refinance or payoff.  I like to have the conversation up front of what would happen if I couldn't come up with the balloon payment on time.  I then like to negotiate an extension (try to get multiple extensions and then if they negotiate it down at least you may be left with one) in return for a sum of money that is acceptable to the lender, but much less than the balloon payment.