What do you think of these terms?

We have a seller financed note that we are putting on a bank loan. We received approval for the following:

Loan Amount: $430,000
Rate: 3.99 fixed with balloon payment in 10 years
Amortization: 20 years

For a sub-$1M loan, I’m happy with this. But, I’m just curious what others think?


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Those are excellent terms. It’s hard to finance sub 1M loans. Good work!

Where is this (state wise?)

Thanks Gonzalo! This is in Pennsylvania. I would characterize the bank as a “regional” institution. We already have one loan with them already so we have a good relationship.


What’s the LTV? Good rate, pretty good terms. Only thing I’d like more is if they could drop the balloon and float the rate. Not all will


Agreed on dropping the balloon. I’ve got a call with them today to discuss just that - from a previous discussion, it sounded like they would do it. LTV was 25%.


These terms are pretty good. For such a small loan I would jump on it.

At 25% LTV, what’s the rationale for putting so much money down? I would try to borrow more money and get better terms. I assume your PP is $1.7MM? If you did a 65% LTV loan you’d be over the $1MM mark and could possibly get a sub 3% rate. Seems like free money to me.

With that much money down why are you going for a bigger deal?

Did you mean it is 75% LTV?

If so, those terms are fantastic. I assume you had to sign a recourse guarantee for it?

Sorry guys, just re-read my previous post. 75% LTV. It is recourse and they took away the balloon, the rate just re-adjusts at 10 years. It’s locked in at 3.99% pending the appraisal.

I spoke with several banks, including another bank that we have a loan, but it seems like since COVID-19, some banks have done away with 10-year fixed rates. Regarding rates, I can’t imagine they could get much lower. And, considering our country’s current state, I can’t imagine them going much higher either.


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Fixed for 10 years is awesome. Mine all float after 5 (and start .25-1.0% higher to boot). Well done.

Thanks Westewart and thanks everyone for the responses. It’s always nice to receive feedback from fellow park owners.


Agree those are good terms. I did a $700k seller note last year at 75% LTV 4% fixed for 5 yrs and due in 5 but with my option to extend 3 years with a $50k paydown. I purchased at something over at 8% cap on in-place income so a 4% spread, 5% spread now with rent increases. Very easy to close and no loan closing expenses, so I’m happy with it.

Poharen - sounds like we are in a similar place. We purchased around a 9 cap on entry. Have raised rents $55.00 since, infilled with a few homes and added a garage rental. Our seller financed rate was 5.5% with a 10 year balloon. I don’t see any issues with the appraisal. Very happy to with the new terms and hoping this bank will want to continue to work with us in the future.


Which bank is this with? Great terms.

First National Bank of PA. They are a regional bank in PA and only do loans in certain areas within the state. We’ve used this strategy multiple times. Get a list of the local banks that are in close proximity to your park and just start calling. You’ll be surprised how many will talk to you.