Refinancing Commercial property can be a major benefit. If you are considering a refinance, take a look at our checklist outlining the things to take into account when discussing options with a trusted finance advisor.
- When rates hit historic lows, the investor can get new debt on the property for long term solutions.
- By exchanging for new debt at lower levels there can be a great improvement in cash flow.
- You may consider borrowing to pay off prepayment penalties.
- When people have debt positioned at several different points that are high one can consolidate their debt at an overall low cost.
- Investors can refinance to get out of adjustable mortgages.
- Get x-tra cash to obtain new investments in real estate.
- Expand your investment portfolio.
- More favorable terms like 75% LTV versus 65% or 60 % LTV’s originally signed up for.
- As the property improves and grows in value, you can refinance and get equity back to investors without selling the property.
- The cash flow change can be substantial in the increase of payments to the investors.
- You may want to change and refinance for a longer amortization period to increase cash flow.
- One may get a larger loan from a drop in DSCR (debt service coverage).
- Investors take money to fix up a property and adjust to higher rents This can be done by refinancing the project to get the cash for those improvements. Later they can refinance to take the money out of the property for investors.
- Construction deals sometimes included Mez. deals or hard money loans. Once the new financing takes place the debt is restructured and money can come back to the investors and the property value grows once stabilized.
There are multiple ways to use refinancing to build a portfolio and expand, to add cash flow, to make this investment more profitable. We believe that this process is and should be treated as an art of investment and strategy. If you believe that you have property that could be used to give you this type of value add- I suggest you it may be time to reach out to The Liquidity Source. A trusted advisor and consultant to help you get the best deal on refinancing your property.
Book a FREE consultation with The Liquidity Source and get our eBook “The Secrets to Commercial Real Estate Financing”.