2nd Deal Negotiations!

[Andrew Hughes]

Hey
I am looking to close on my second property after successfully rehabbing and putting my first property on Airbnb. This second property has a good block shell and has passed inspections with no major red flags. I have a private lender who is putting up 90% for a interest rate of 5% while I am putting up 10% and the reno costs. These terms are based off a 5 year balloon on a 30 year mtg. I’ve done the homework with several high comp sales close with even lesser quality or square footage in the homes. So I’m confident in the property but my only resistance is my terms with my private lender. 

The issue is my lender has a prepayment penalty clause with NO prepayment in the first year, 10% after first year then 5% for years three and four, then 0% in year 5. Since I think this would be a good flip I don't like this clause and am looking for alternatives. I proposed a loan fee of 2-4% but she wouldn't budge. I am also not completely against finding a tenant as it’s close to several k-12 schools and new home community developments listed for well above my buying price. We both work well together and understand each other's motivations so I don't want to burn bridges. Has anyone had this experience before or potential compromises?