All Forum Posts by: Michael Sorensen

Thank you, all; very helpful. I've decided to go for it and you've helped me feel good about it. Thanks for the quick feedback!

Thank you, @David Miller!

Thanks @Greg Scott, that is helpful. I'm warming up to the idea—it seems like my best option at this point and that the risks (while present) are relatively low with something 15 years out. Anyone else agree/disagree?

@Greg Downey I don't have 25% to put down; 15% is about as much as I'm comfortable with right now...

Hi All,

I have what could be my first multi-family property under contract (a fourplex that cash flows decently well) and found a loan that offers 15% down for an investment-only (non-owner-occupied) property. The rate is good (4.5%) but it's a "30-in-15" with a balloon payment of about $300,000 at the end of the 15 years. Still being relatively new to all this, and being pretty risk-averse, that balloon payment makes me nervous.

I've read all about balloon payments and understand the general risks/benefits. I hear they're common in commercial real estate? Since the property cash flows well, my perfect-world-scenario would be to have a nice stable 30-year fixed so I could just hold and weather a downturn and only sell if it made sense, but I don't have 25% to put up for a down payment and don't want to owner-occupy.

So my question is this: how crazy would I be to go with this loan? In 15 years, I've got to think it will appraise for at least $300,000 should I be forced to sell (buying for $535k right now; 15 years ago it sold for $215k), but if the market softens or crashes, could it go lower?

The property is in West Valley, UT. UT is booming with no end in sight, but I also know there is rarely an "end" in sight until it comes...

Thank you in advance.