409. Negotiate the Loan, Not the Price

**Key Takeaways** **Negotiate the loan, not just the price.** Financing terms can have a bigger impact on cash flow than a purchase-price reduction. **Interest-only can provide crucial breathing room.** In my $2 million building example, 12 months of interest-only payments adds about **$31,000** in year-one cash flow and lifts the cash-on-cash return from **3.6% to 7.7%**. **Use interest-only strategically.** The goal is to build reserves or stabilize the property before the higher payments begin—not simply to delay principal payments. **Ask for a longer amortization.** Moving from a 20-year to a 25-year schedule can lower payments, improve debt service coverage, and increase borrowing capacity. **Show lenders how you’ll reduce their risk.** A clear lease-up or renovation plan, tenant commitments, or other evidence of stability can strengthen your case. **Understand the trade-offs.** Interest-only payments and longer amortization can improve near-term cash flow, but they don’t erase the debt—and payments may rise when the interest-only period ends. **Consider recourse as your track record grows.** Strong assets, experience, and a substantial down payment may help you negotiate less personal liability.