New Construction Apartment Cash Out Refi

3 Replies

Im wanting to know if someone has ever built a new construction apartment complex and cashed out their initial investment at the end if the loan to value worked out. Is this possible? 

Say the construction costs $1mil and 25% down is needed. If it appraises at much higher can you recoup your initial 25% down and just have a higher principal?

@Wade Stahle . This may be eligibale for agency loans which can go up to 80% LTV. That is always the best case scenario. I would expect 70-75% LTV. You could crunch the numbers from there to see if you money could come back out.

@Wade Stahle

Yes, it is possible to build a property then have it appraised where you recoup your entire initial investment.

The LTV you receive on the refi will be dependent on multiple factors. The bank you use. With a value over a $1MM you should be able to get agency debt and @Greg Downey is correct that they can lend up to 80%. It all depends on the market you are in. Another factor that is changing how much banks lend is interest rates. The higher the interest rate is the lower the LTV potentially could be. With just the recent 50 basis point increase in rates lenders have dropped the LTV they provide some borrowers. 

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