Right now, we’re going to talk about different loan programs and different interest rates.
Bob Nelson, Eugene real estate investment broker
Isaac Grant, Eugene commercial loan officer
Bob Nelson: Joining me today is Isaac Grant. Isaac is a commercial loan officer with Oregon Community Credit Union here in Eugene, Oregon. Isaac, thanks for joining me.
Isaac Grant: Thank you, Bob. It’s been a real pleasure to speak over the last few days. Looking forward to another conversation here today.
Bob Nelson: Let’s go with an idea, different loan programs and maybe the different interest rates that would apply to those programs or whatever, the difference between a loan that’s adjustable periodically versus one that’s fixed for a period of time, et cetera. Can you get into that for me?
Isaac Grant: Yeah, this is something that I can’t stress enough to folks that need investment real estate loans. Know your options upfront early in the process, especially if you’re looking at a purchase situation, especially if you’re looking at your 1031 exchange and you have a limited timeframe to secure your financing, make sure that you’re having in depth conversations with your lender about what options are available to you.
Ask the important questions on do you offer five-year fixed? Do you offer a 10 year fixed? If I’m doing a five-year fixed on a 10 year loan, what happens after the first five years? Is there the ability to buy down the interest rate with a higher loan origination fee? You want to be asking these types of questions and understand that process as well. Make sure that you’re educating yourself with your real estate broker.
Isaac Grant: I think one of the best things Bob does with his clients is he sits him down, he has his spreadsheets, he has the different equations and things that he goes through with his clients so that they understand what their actual rate of return is, and lending plays a big part of that process. Both the fee structure and the rate structure can vastly change your cash-on-cash return depending on what lending options you decide to go with. It all comes down to your own risk tolerance.
Bob Nelson: It’s interesting in that you are very, very informed and look at things from an investor standpoint, and that’s not necessarily typical of other commercial loan officers. They’re going by a book with no familiarity with the property and how they typically perform and the risks that are there. That’s why I really like doing business with you Isaac.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.