Commercial Loans with Balloon Payments

[Rick C.]

Hello,

I am looking to cash out refi properties owned in my LLC. So far, I have only been able to find commercial financing, which I am fine with, but I want to do my due diligence before taking on this level of risk. Here are the details of the offer:

6% fixed with 5 year balloon

15 year amortization

LTV 89% purchase price or 80% appraised value, whichever is lower

The loan would cover 3 single family homes that I own in the Tampa area. Let's assume that the properties are worth enough that I would be going the 89% LTV route. These are the details of the homes:

Purchase price $45k, rents $850/mo

Purchase price $49.5k, rents $1440/mo

Purchase price $34k, rents $1100/mo

Given the properties being financed, how do the terms look? Are there any questions I should be asking before agreeing to move forward with this loan? I have never had experience with a balloon loan, so I am concerned that there is something important I am missing in my risk assessment. Thanks in advance for any advice.