Commercial Loan for Office Space Rental

[Paul Andrews]

What are the best financing options for my commercial office space? The owner-financed note I used to purchase the property will come due within 6 months. I could make the balloon payment for the remaining 30% of the purchase price to own the property 100%. But I'd rather refinance for tax advantages and pull out money to invest in other properties. This is my first commercial property, so I'm learning as I go. My goal is to benefit from the snowball effect, but don't know how to get the (snow)ball rolling!

Based on my research, it seems my options are a bit limited:

- I can't do an SBA loan. The property is currently used as an investment for rental RE. 

- Many larger lenders require a min. loan amount of $500k. I estimate the property's appraisal value would be ~$400k to ~$600k. Assuming I get an appraisal at the higher end, that would be roughly 75% LTV for a loan of $500k. This would turn my little cash cow into a piggy bank that treads water while giving me access to new funds for another investment.

- I've thought about pursuing a portfolio loan by finding a second commercial property and using my equity in my office building to purchase the new property. Which type of lender would be best for this? 

- I tried using a mortgage broker when I purchased the property, but he disappeared a week or two before closing, so I'm a little gun-shy about this option.

- Are there any other reasonable options in which the loan's interest rate would be less than 8%? 

I appreciate your suggestions or recommendations!