Am I getting the short end of the stick? 5/10 AM

[Cameron Price]

Hey guys, 

I need more help! I have a rental property in Darlington, SC worth about 75K that I'm trying to get a LOC on. I'd love to get 60K or so. I took the advice I've read on here and found a local bank willing to work with me. The only product that I'm being offered at the moment is a 5/10 AM. SO, 5 years of payments, amoratized over 10 years correct? That would mean a balloon payment at the end of 5 years! He says I could refi after 5 years, but the interest would be dependent on the market rate. My credit score is about 750.

I can see this being useful for flipping. ( 20-30K property, 10-20K rehab, 70-80K ARV) but I feel like there's something better out there. How are you getting longer term financing??? Do I just need to talk to a different bank, or is this a decent way to leverage this property. Any suggestions on a different bank? And if so, could you send me contact info?

I had him go ahead and order an apparaisal, to get the ball rolling. I'll get to see what it's ACTUALLY worth instead of my guessing, so that's a positive no matter how the rest of it turns out.

FYI, I'm interested in both flipping and buy and hold. My current plan, If I can get some good working capital, is to flip a couple and then use the profits to purchase one for buy and hold. Repeat and build a nice portfolio.

[Darren Eady]

I would speak with another two banks and also find out what they meant by 5/10 AM, is that a fixed five years and due in 10? What are the options when the draw period ends? Does the LOC become a 20 year fixed or balloon? Once your docs are put together for one bank, it's easy to know you're qualified and send your info. to another bank if needed.