How to transition from Private lender to Commercial

[Alex Adams]

My LLC partnership owns 4 residential properties. They were purchased with money from a private lender (family). Each home has its own loan agreement, and each loan is currently interest-only at 5%. The agreements stipulate that each loan must be repaid by 2017.

All homes are rented, and have at least 6 months of rental income history. On average, the monthly rent is 2x the interest payment.

I am watching interest rates go up, and this trend seems like it will continue far into the future. I am looking for the best way to get commercial bank financing for my residential properties. The loan agreements with the private lender are negotiable, so they can be restructured if need be in order to make commercial financing more attainable.

Total owed is $407K. Total estimated LTV for all properties is 88%. (One property is worth about the same as is owed, so without this property factored in, the LTV would be 82%).

With the ability to restructure the loan agreements already in place, I am looking for advice on how to approach a bank to finance these properties.

Thank you!