Work with the top commercial mortgage broker in the country to access highly competitive financing programs that can provide a cash out refinance on your commercial property. We have no stipulations on cash outs, meaning you get the cash at closing and are not required to hold it with the lender. Also, since our lenders are not held to such strict regulations as local banks, we are able to achieve much greater LTV’s, getting our borrowers the most out of their properties.
A big advantage in cash out refinancing through Clopton Capital is that we place no restrictions on what the released funds are used for. In contrast, bank lenders typically either don’t countenance commercial cash-out refinancing at all or alternatively they impose severe restrictions on the “freed” money applications. When you work cash-out refinancing with us, you can be assured that the funds will be immediately available at closing. There will be no strings attached even if there are issues involved in other loan arrangements such as foreclosures, principal repayment, unfulfilled collateral requirements, or drawing down lines of credit. These are some of the benefits of cash-out refinancing, particularly when cash out refinance rates are as low as they are now. A cash out refi could be perfect for your needs!
Refinancing commercial real estate with cash out can be effective for many investors to find better loan terms, the kind of favorable loan terms that can improve your financial standing. With Clopton, you’ll find access to trusted commercial cash out refinance lenders to help you get the commercial mortgage cash out refinance you’re looking for with terms you’ll love. For everything you need to know about your next commercial loan cash out refi, read on.
What does it mean to refinance commercial property?
A refinance is different from a first-time purchase because there are no down payment requirements, and first costs should be less since closing costs in the past were in the range of 2% to 3%.
The Commercial Cash Out Refinance, assuming you meet the cash out refinance requirements is a real opportunity for commercial property owners in need of cash. When budget constraints don’t allow you to take on new projects or invest into your business, provide you with all the benefits of refinancing but also an additional infusion of cash. It does not matter what type of property you may have such as vacant land, commercial building or apartment complex; we can help you operate more efficiently with our cash out refinancing program.
How to refinance commercial property
You can use any conventional commercial mortgage lender, but we work with the top commercial real estate cash out refinance experts in the industry; we have no stipulations on cash outs, meaning you get the cash at closing and don’t have to hold it. Also, our lenders aren’t held to such strict regulations as local banks so we are able to achieve much greater LTVs for borrowers who put down 20%. This helps us provide the best cash out refinance rates for borrowers looking for an inexpensive cash out refi that will help them take advantage of the cash flow provided by cash-out refinancing.
Why would an investor consider a commercial real estate refinance?
Investors have a number of reasons for considering this type of loan. Investor loans are made to properties that are not used by the owner/borrower on a day-to-day basis, so they may be more left alone and less well maintained than someone’s home might be. If an investor needs capital at a low cap rate or if their property needs repairs that need to happen fast, then refinancing makes sense.
Also, refinancing frees up funds that could be used to buy other properties.
In the end this loan is a great way for an investor to grow their portfolio and make money. With a refinance you can improve both real estate portfolios with one loan.
Pros and cons of a commercial property refinance
Wondering about the pros and cons of a commercial property refinance or a cash out refinance example? We’ve got you covered.
Commercial Property Refinance Pros
- The ability to use the money for other projects outside of commercial real estate
- Improving a portfolio by reinvesting the money into a different property
- The rates are much lower. This means that if you have multiple properties you can refi each one at once to get more money for your business without paying more in interest.
Commercial Property Refinance Cons
A commercial real estate refinance cash out can come with its downsides. One reason why cash outs aren’t as popular with commercial property owners is because up until recently they couldn’t access them easily enough unless everything was doing extremely well financially speaking. However, even the best businesses experience financial difficulties. A commercial real estate refinance loan can help.
This type of loan is not for everyone and it’s important to do your own research and get help from a professional if you’re thinking about making this decision. Whichever way you go, know that there are options out there that can benefit your business in ways you never knew possible!
Commercial real estate refinance requirements
The requirements for a commercial real estate refinance are that the property be owned 100% by the borrower, that it be professionally managed, and there can’t be any liens on the property. The property also needs to be located in an area where the underwriter does business.
Commercial property refinance loan types
There are two types of commercial property refinance loans: the cash-out refinance and the traditional refinance.
A cash-out refinance (or refinance cash out) is for properties that are not used by the owner/borrower on a day-to-day basis. It provides all the benefits of refinancing but also an additional infusion of cash to their portfolio. For this type of loan, you can use any conventional lender, but we work with the top commercial real estate firm in the industry.
A traditional refinance is for properties used daily by owner/borrowers where budget constraints don’t allow them to take on new projects or invest into their business. The mortgage rates for cash out refinance are much lower for this type of loan.
Cash out Refinance: What Does Cash Out Mean?
A “cash out” refinance can be done to obtain cash for any purpose, not just to buy another property. An improvement to the current home may only take a few thousand dollars, but saving up that much in order to do it could take years. A “cash-out” loan will allow the borrower access to all of their equity in one shot without needing proof of emergency or just cause.
What is a cash out refinance?
So, what is a cash out refinance loan? A cash out refi is when an investor gets most of the equity in their commercial property (we’re talking 70-90%+) in order to do what they need to do with it. This could range from repairing the building, buying another commercial property or investing in themselves for personal reasons. Unlike a traditional home mortgage, there is no net operating income requirement and no restrictions on how you use the funds. The key is that they must be using this for commercial purposes (i.e., not living in the building) and also owning 100% of the investment – meaning there can’t be any liens or other investors sharing ownership with them on this loan.
What is a cash-out refinance loan?
A cash-out refinance loan is where you take out additional money from your property to do anything other than pay off the original mortgage. If you want to refurbish the building, buy new equipment or expand your business, a cash-out refinance loan can help.
What is a commercial cash out refinance?
A commercial cash out refinance is a loan that helps business owners to pay off debts and rebrand for new businesses.
A commercial cash out refinance works well for business owners because it removes existing debt on the property, which makes the business more attractive to new investors. It usually also requires less of an up-front fee than other types of loans. For example, if you want to use your house as collateral, you may be required to pay 3-5% in fees on top of your mortgage payment while with a commercial real estate loan you might only be required to put down 1%. Unlike traditional financing which charges high interest rates and comparatively short terms (often five years), our solutions typically ask for no upfront expense while providing longer terms.
Get a Commercial Cash Out Refinance with Us
- Loan amounts from $1,000,000 up to $50,000,000+
- Up to 80% LTV with 1st mortgage – 90% with mez/pref
- Fixed Period of variable, 3, 5, 7, 10, 15, 20, 25, 30 years
- Up to 30 year amortization, with interest only periods
- Non-recourse, with carve outs
- Nationwide lending area
A Commercial Cash Out Refinance Example
Borrowers can take out a commercial cash out refinance loan in order to get funds for other purposes. Let’s say that you own a commercial building and are looking to purchase a second, but you’re in need of capital. If you’ve built up equity in your first property, you can complete a cash-out refinance, pull cash from the resulting equity in your original property, and use it toward a purchase of the new property.
Real Cash Out Refinance Client Case Studies Resolved by Us
Estate Borrower Cash-Out Mortgage
An estate borrower contacted us looking to refinance a maturing $3 million business loan for a retail trip center investment property in North Carolina. The estate had purchased the property over 10 years prior and it had substantially increased in value. In next to no time we arranged a cash out mortgage based on 75% of the new appraised value, resulting in a $6 million loan upgrade – thus putting over $2 million of cash out proceeds into the owners pocket after settlement costs. We managed to transition the estate into a refinanced loan with non-recourse, 10-year fixed, with a very competitive rate, and a 30-year amortization.
Cash-Out Refinance on Indiana Office Building
An LLC borrower referred to us wanted to cash out refinance an office building in Indiana, with the idea of rearranging a long-term fixed-rate deal for loan redemption. Even though tenancy stability was a little uncertain we were able to organize a $2.8 million refinance based on a 15-year amortization and fixed rate of interest with one of our close-relationship insurance companies. The borrower realized almost $1 million in cash out proceeds and a new manageable loan containing a competitive interest rate and redemption terms.
Fast Recapitalization and All-Cash Closing
A partnership entity had purchased a commercial retail center in Wisconsin for all-cash. At the same time, it had entered an acquisition commitment to invest in multifamily apartment buildings with a very short time-line and an all-cash closing. Essentially, the client was relying on us to very quickly recapitalize the retail center to extract a substantial refinance cash-out as the only means of funding the new real estate. We moved into action, finding a trusted lender to advance over $4 million to the partnership based on a 75% LTV non-recourse loan, thus allowing him to acquire additional properties on time.
How does cash-out refinance work?
So, exactly how does a cash out refinance work? The amount of equity you can get on your property depends on the value of your commercial property. If you want to refinance $100,000 worth of commercial property, for example, an 80% commercial cash-out refinance might be possible while a 90% cash-out refinance may only be achievable with lower valued properties.
A major advantage of a commercial cash out refinance is that it allows borrowers to borrow even more without putting up collateral. If you want to buy a new property with a loan that requires a higher down payment or wants secured collateral, you could use equity from an already-secured one as collateral. Cash-out refinance rates are lower for this type of loan because there’s no down payment and because loans
What is the maximum cash out refinance?
The maximum refinance with cash out is determined by the value of your property when you cash out refinance commercial property. For example, if you own a commercial property worth $100,000 and want to get an 80% limited cash out refinance loan, the maximum would be $80,000. The amount is limited by what’s available in your equity.
Commercial real estate loans are similar to home loans except they offer more flexibility with lower interest rates because there is no collateral required for securing them. If you have commercial property that has enough equity built up on it or properties that could help secure each other through cross-collateralization then you may qualify for this type of financing solution.
Can I do a cash out refinance investment property?
Yes, it’s possible to perform a cash-out refinance on an investment property. The process to cash out refinance commercial investment property is a common method used by real estate investors and developers for real estate investing to access cash to fund renovations or other projects. It’s true that if the loan is a portfolio mortgage, you could cash out at closing.
In addition, more people are taking advantage of creative financing, which includes mortgages with up to 100% financing. In this type of arrangement, it may be possible to refinance more than 50% of the existing mortgage balance and release the equity without paying any property taxes or homeowners insurance.
Commercial cash out refinance FAQ
Looking for answers to some of the most common questions relating to commercial cash-out refinancing? We’ve got you covered with some of the most relevant answers in order to get you the information you need.
What is commercial refinance?
A commercial refinance, sometimes called a new construction refinance, get cash out, or business loan refinance is essentially the same as an ordinary home mortgage but for large purchases. It helps homeowners get new financing on properties they already own which can help them decrease their monthly payments or even get cash back in some cases.
Many times people choose to look into refinancing their current house, condo, townhouse or other type of property because of the multiple advantages that make it more affordable for your regular income like lower monthly housing expenses and also high tax deductions. Others might find themselves needing to change properties after finding themselves owing more on residential property than what it’s worth on the market; this is called negative equity.
Are there tax implications for a cash-out refinance?
Commercial cash out refinance rates aren’t the only consideration— what about tax issues?
In a cash-out refinance, you borrow even more money from the bank and then pay off some of your current loan balance with the additional funds. The amount you actually receive in your hand is generally smaller than what you might get if you had simply refinanced. That’s because the old debt has been paid off quicker, so there’s less investment on your new mortgage which has a shorter term. If this situation sounds familiar to you, it may be smart not to do a cash-out refinance – no matter how tempting it might sound at first glance.
When it comes to the tax implications of a cash-out refinance, the answer can depend on your individual situation and is best left to a tax professional. However, feel free to ask your Clopton representative about any tax concerns you have relating to a cash-out refinance.
What is the maximum cash-out refinance?
The maximum mortgage you can get through a cash-out refinance is generally equal to 80 percent of the property’s market value. If you want to get a higher loan-to-value, a cash-out refinance isn’t the best option.
The best way to find out what you can get from your cash-out refinance is by applying for it! The process takes just minutes, and we’re here to answer any questions that might come up along the way.
Can I sell my house after a cash out refinance?
You can sell your house afterwards as you have a clean title and a more advantageous mortgage.
In most cases, refinancing leads to benefits for both home sellers and buyers. For the seller, refinancing provides an opportunity to reduce their monthly payments or make large renovations without worrying about exceeding their income limits or later defaults. In some situations, it may be necessary to increase the mortgage debt beyond 140% LTV in order to afford new items on a cost-basis basis over time – this is generally not an issue with cash out financing as allowed up to 75% LTVs but you should check with your lender before beginning any work that does not match 100% of your equity position after closing costs, etc.