Commercial real estate refinancing question

[Mengzhu Rolff]

Hi guys, I'm a newbie for commercial real estate investment,I have a question about refinancing the property. I didn't have much money to buy this commercial apartment building, so I used HELOC as down payment to bought this property, and the rest I took mortgage. For BRRRR method, how do I refinance the property and get some money back to invest on more properties? Do I have to pay off HELOC and mortgage first? What the refinance can really help if I have HELOC and mortgage? Is there a smart way to get rid of HELOC? Thank you!

[John Wijtenburg]

You need a cash-out refinance. How you use that cash is up to you, but the lender may want you to deleverage. Most banks will want the property to season before providing a cash-out refinance.

Get in touch with a local mortgage broker to get a better sense of the market for your particular deal.

Regarding strategy, your level of indebtedness is a very personal decision. Keep the HELOC if it enables you to build the business you want.