Paying down principal

[Alan Siciliano]

Question to the group my partner and I owe several houses in a portfolio and wanting to sell them in a perfect world it would be nice to sell all at the same time not probably not going to happen, we have a offer on one of the houses and a almost double then it appraised for in turn the Bank told us we would apply to balance of principal were OK with that but now the Bank said they want us to put  additional money down over the sale price or they will not release the property since it effects the cash flow, does this sound right, we also almost had two sold and hey told us we would have to put the total sale price on principal and pay realtor fees out of our pocket. Someone Please tell this does not make sense.

Thanks 

Alan        

[Robin Simon]

Yes - its pretty standard to require a cushion over and above the price on a portfolio loan, its to prevent the bank (lender) from adverse selection, i.e. the borrower releasing the better portfolio properties while keeping ones that are more troubled or not cash-flowing as well as collateral