Intrest Only Non-Recourse Loan

[Bruce Harding]

I am new to the loan process.

I am looking at this scenario:

$1.75 MM building

$475K Cash Down

finance $1,225,000

I have loan options. Building yielding $116K per year prior to PITI.

NIO about $65K currently.

Regular mortgage of 6% for 20 Years would be approx. $108,000 Per Year so no way to afford that up front.

Working with broker on Interest Only Loan for 5 Years - Payments about $61,500 per year.

Current owner paying about $50,000 K payments.

Property would baloon in 5 years.

Is this a viable option and then refinance after the 5 years ?

With a regular mortgage $116 - 108K would not give me enough to run the building obviously.