Just curious how many of you choose to finance through commercial loans on small properties (i'm thinking 4plex) that a conventional loan can finance. I talked to a commercial banker recently and he told me everyone comes back to the commercial bank for loans. The idea of a rate reset every 5 years when I can just go and get a fixed rate seems like poor logic. Especially when it's going to be higher than a conventional loan to start. I know interest rates are rising so who knows what it'll be like 5 years from now. He argued it'll be paid down quicker, but I argue that I can just make extra payments on the principle if I want that and I won't need to worry about a commercial loan eating my cash flow either because it's my option as to whether I want to pay extra or not. Also, say the economy tanks or the interest rates are just really high after the reset, I can ride the storm out better I would think with a conventional loan since it would require lower payments than the conventional loan. He argues I can sell if that happens, but why would i want to? Higher interest rates = lower property values. I know banks make money off interest. Is this guy just trying to make money off of me or am I missing something? That's my thought process on the whole thing anyways. Would love to get some input from others. Thank you
