Refinancing a 6 unit

[Andy Crooks]

I am looking to refi a 6 unit. I currently have a 5 year fixed/25 amor, with a balloon payment coming up in 19. There are no pre-payment penalties so I want to lock in rates now before interest rates climb too much. Probably 35% LTV, so some decent equity especially since we have been able to increase rents and got a new roof from an insurance claim. I am not looking to pull out cash, just take advantage of low rates.

What I am finding is that Fannie and Freddie want no part of this.  I have been able to find up to 7 year fixed/25 amor again with no prepayment penalties from a bank I do a lot of business with but I would love a 15+ year fixed on this asset.

I am considering bundling this with some other assets to potentially hit the secondary market/life insurance companies/etc, but does anyone have any other suggestions on financing options?

[Brandon Ingegneri]

There are some nontraditional lenders out there that do "conventional" term loans for any number or type of properties. Generally, these institutions have slightly higher interest rates. I personally have not utilized them, but they are certainly something worth exploring. We are talking 15, 20, 30 fixed year terms on property bundles etc. this may be what you are looking for. 

I have personally found that once I began utilizing the commercial lending dept at my bank that things really began taking off. Initially, there are some hoops to jump through, but once the track record was established, I was off to the races. Once you become a preferred customer, all of a sudden, the rule book is a little different for you. You'll find that there won't be much that you can't do within reason. Taking the time to build that relationship with the bank was something that paid dividends for me and that I would recommend. After you do this, you will find that there is much more discretion when it comes to lending related to your portfolio.