The broken refinancing process

We’re currently in the process of refinancing three properties, with another due to begin shortly.

Think we will end up refinancing another 8-10 during 2018.

Over time, as our portfolio grows, I expect we’ll be rolling refis constantly.

And, I have to tell you: The prospect terrifies me.

The financing process is broken.

It’s totally chaotic and opaque and, because you’re “exclusive” with one bank for ~60 days, the bank feels free to re-trade the terms (ooohhhh, yeeaaaah, about that rate we promised…).

All of the other participants (banks and loan brokers) are fine with this situation, because a fragmented / opaque market creates information asymmetries which benefit the most active participants.

As a borrower, it’s a disaster.

I would absolutely love to find a bank that has a streamlined application process, understands borrowers who syndicate equity, offers competitive terms and won’t re-trade.

That bank would get a ton of business from me and, I expect, a lot of other borrowers.