Saturday, May 5, 2007

East West Bank's Financing Promo

Apartment building loans 6.75% with 1 point, fixed for 10 years and ONLY 5 years prepayment penalty. Good deal? I think not. Conduit lenders are about 100 basis points lower for 10 year fixed rate money. Yes, there are 5 more years of prepayment penalty. Although, that probably is insignificant when you calculate cash flows on a 5.0 cap rate deal. Would you like to cash flow or not? Shop around.

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