19
Hit 47 balloon payments in one year. That can't be right.
My ARM reset and I ran the numbers. 47 separate payments due over 12 months on this one commercial property in Phoenix. Broker never mentioned that part. Is this even legal or did I get screwed?
3 comments
Log in to join the discussion
Log In3 Comments
the_matthew29d ago
Wow, 47 payments? I'm gonna push back here and say that might actually work in your favor if you know how to use it. More payments means more chances to refinance or sell off partial notes when rates dip, and @ryan_gibson84 got out of his jam but those quarterly payments lock you into bigger chunks of interest each time. You're basically dollar cost averaging your debt service this way, which sounds crazy but it can soften the blow if vacancy hits for a month or two. Phoenix commercial market is hot enough that you could flip this property fast and these balloon payments just become a timing issue rather than a money problem.
6
seanlee29d ago
...and here I thought I was being smart by finally getting into commercial real estate, turns out I’m just the guy who can’t count to 12. Dude, 47 payments in one year is wild - that’s like a payment every 8 days. I’d be lucky if my wallet didn’t just spontaneously combust. Sounds like your broker might have left out the "fine print" part of the tour, right?
1