From what I've seen and read, most of the reason operators get in trouble is that there is some type of "event" that has occurred (usually their loan has matured or they've defaulted on their existing loan) and they need to refinance their loan and the lenders require a new appraisal to be done, which usually leads to a lower appraised value, and a lower loan amount, which "forces" the owner to pay down their debt.

Hi Curt, if he's experienced, organized, and trustworthy, then it may be worth it to keep it at a lower interest rate like 10%.

This now means you’re coming to the table with much more cash (lower LTV) to meet a lender’s DSCR of 1.25…some lenders have now raised this to +1.30, which means an even lower LTV.I’m not saying a 5.75% is necessarily bad.  

Getting a lower rate will also depend on the amount you're putting down.

TIC offers lower entry costs and flexibility but comes with shared risks and complexities.

This account can be a great tool to defer and grow income.. ultimately helping to lower taxes paid in the current year and over a lifetime.

This could reduce your help lower your taxable income if the investment aligns with your lifestyle goals.

The obvious downside, however, is that they’ll offer higher interest rates to compensate for the added credit risk.If you’re willing to submit to a traditional underwriting process, I’m pretty sure you’ll be able to find a rate that’s several percentage points lower than what you’re being offered now.

This is important, because depending on the variables, a cashout refi may give you a lower comparable rate in the first year or two but a higher rate for the remainder of the expected life.

Proceed with caution and make sure you create enough room for value loss.My client recently had this issue and I told him only way to take this is if seller repairs it and lowers price significantly for value loss.