Commercial Cash Out Refinance
A commercial cash out refinance is a mortgage refinancing transaction in which the new mortgage amount is greater than the existing mortgage amount plus loan settlement costs. The original mortgage is retired and a new mortgage created, with the difference between old and new available as cash out to the property owner.
By obtaining a commercial cash out refinance, commercial real estate owners are able to take advantage of trapped equity in their properties and use it for other purposes.
In contrast with typical banks, Clopton Capital places no restrictions on what the funds are used for. Typical bank lenders either don’t allow commercial cash out refinancing or else closely scrutinize what the money is intended for. We make the funds immediately available at closing with no questions asked.
Here’s an example of a commercial cash out refinance:
Property value = $4 million
Existing loan balance = $2 million
Refinance loan amount = $3 million (75% LTV)
Proceeds given to owner = $1 million
Contact us about our Commercial cash out refinance programs
To understand more about cash out refinancing, contact one of our commercial mortgage lenders by calling 866-647-1650 or using the Contact Us form available from the menu.
Clopton Capital is a nationwide commercial real estate capital company and mortgage banking firm. We specialize in commercial mortgages, commercial bridge loans, and real estate private equity for transaction sizes ranges from $1 to $40 million. The commercial mortgage lenders at our company bring long lasting relationships with capital providers that give our clients deep insight and superior execution.
Examples of Commercial Cash Out Refinance Deals
Example 1) A borrower contacted our company looking to refinance a maturing $3 million loan for a retail trip center in North Carolina. The owner has purchased the property over 10 year prior and the NOI and value had increased substantially. Because of the increase in value, we were able to arrange a cash out mortgage, up to 75% of the new appraised value, which came in at $6 million, putting over $2 million in cash out proceeds into the owners pocket. The loan we arranged was non-recourse, 10 year fixed with a very competitive rate, and had a 30 year amortization.
Example 2) A borrower was referred to us that was looking to cash out refinance an office building in Indian and put it on a long term fixed rate deal. The borrowers law firm occupied a portion of the office building, but was not a major tenant in the building. We were able to arrange a $2.8 million refinance with a 15 year fixed/15 year amortization with an insurance company that gave the borrower almost $1 million in cash out proceeds at a very competitive interest rate.
Example 3) An owner that had purchased a commercial retail center in Wisconsin for all cash was looking to recapitalize his investment, cash out dollars, and invest the money into more properties. The borrower had a very short acquisition timeline when buying the property and had to close with all cash. We were able to arrange a 75% LTV non-recourse loan that put over $4 million back into the borrowers pocket to allow him to acquire additional properties.