Stepped in to alternate universe today


#1

Had the weirdest thing happen today that might benefit others here with commercial loans. I took some requested information to my main banker to update his files for an upcoming audit.

He looked at me and said something to the effect of I know LL’s are having a hard time right now and I’m going to do something that might help you a bit… He did a loan modification on the spot for our biggest commercial mortgage taking the now variable rate loan which was something like 8.17 currently to a 7.75 fixed same terms otherwise and gave me the option of making interest only payments anytime during the next 6 months if I wanted or needed to.

This basically locked in both of our profits and reduced both of our risk in these turbulent times. Put simply with fed rates dropping again it makes sure his rate doesn’t go below 7.75 and it insures that my rate won’t go over 7.75 once the economy stabilizes. Some my like this idea, some may not, but I consider this a win win. Not sure if this is achievable with big banks as this is a very small local bank with 3 branches.

It might be a good time to go talk to your bankers and see if you can get loan terms you don’t like modified while everyone is nervous and spinning in circles.

Best Wishes,

Ryan Needler


#2

I was fortunate to have mine do something similar - with a twist. He locked mine in at 7% for a couple years and also extended the amortization to 20 years instead of 15. In my situation that was a good thing because it reduced my payment by $4k monthly. I can always pay more to make up for what I lose with the extra time. For now it gives me a little more room to offset losses I had created with other businesses. I asked and they agreed so it’s up to me now to find a way to fill my remaining lots with homes as the demand in my area is good and I owner-finance land/home packages.