Community/Recourse Bank Debt


Any of you with small/local community bank debt should reach out to your bankers. Was able to shave off 0.35% off this latest move (to 4.4%) without doing anything… Just a signature for terms revision. No fees, nonsense, etc. Obviously make them aware of competitive dynamic and several other banks looking to refi/recap property/portfolio. This is a good example of some of the benefits of recourse debt. You continue to be fixed (cap) but have a free option on the floating side in the event things move in your favor.


Good to know. Is this something you do when rates decrease?


Thank you for sharing your experience!

So if I’m understanding correctly you went to your bank and suggested/stated that other banks were looking to refinance your debt, asked for a rate reduction from your current bank, and got it?

Do you mind if I ask how much far you were into the term of your loan?

I have some loans that are 1-2 years into the 5 year term and doing this seems gutsy. Even if I were to refinance with another bank at a much lower rate I likely wouldn’t come out ahead after paying prepayment penalties, which I’d assume my current bank would know.


Both sub 1.5 years into 5 year lock. No prepayment penalties.


What state or part of the country?


Upper midwest

Some like to use this FHLB 5 year +200-250

I always put my foot down and refused to be tied to prime


I don’t think I’ve ever even gotten a loan offer that had a zero prepayment penalty. Is this a regular thing that other investors have on their loans?