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Updated over 3 years ago,

User Stats

67
Posts
28
Votes
Dr. Jordan E Smith
Pro Member
  • Alpharetta, Ga
28
Votes |
67
Posts

Commercial Loan Variable Interest Rate After Only 5 Years??

Dr. Jordan E Smith
Pro Member
  • Alpharetta, Ga
Posted

Hey all! 

I'm looking at an rv / boat storage complex in GA, and the numbers work for us EXCEPT for the fact that we are being quoted on a commercial interest rate that can only be fixed for 5 years. 

Wondering if anyone has any input or strategies on how to ensure cash flow stays positive if interest rates rise once the variable rate kicks in. Never borrowed commercial before so excuse the ignorance! 

Not sure if this is a standard deal with commercial loans having only a 5 year fixed rate and if so, what investors are doing to ensure returns stay positive once this period lets up and interest rates rise. 

Thanks in advance! 

Jordan 

  • Dr. Jordan E Smith
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