Free & Clear Morgages- Commercial Properties

[Account Closed]

I own two commercial properties free & clear of mortgages (Office warehouses) (Both are leased out) My question is has anyone ever used there paid off properties as collateral to buy other properties. If so what would be ways to structure the properties as collateral.

[Jon Holdman]

Sure. Its called cross collateralization. You would offer the existing properties as collateral for the new loan. They would get deeds of trust put on them.

You should be sure to consider putting partial release terms into the loan so if you want to sell one of the properties you can pay off some increment of the loan and get a release on that property. Otherwise you would end up having to do a refi.