Is CRE cash out refi for income producing property still available?

Question

We bought an industrial warehouse for ~$250k and is in the process of renovating it. The goal is to finish the renovation by November and then rent the warehouse to tenants. Our estimated ARV will be ~$850k. Currently the entire project is being funded by our own cash and we are looking for financing options to pull out our capital once our asset is stabilized.

I had one conversation with a CRE lender and she indicated that CRE cash-out refinance is not really available these days given market condition. Is this true?

Erik Estrada · Answer

It will depend on when the property was purchased. Many will want to see at least 12 months seasoning to use the full higher ARV value.

Jacob Gerber · Answer

In our area there are definitely lenders who would be willing to do a cash out on the property. There is a good chance they would limit the loan amount based on either appraisal, or purchase price + improvements (ie project cost), whichever is lower. If you want to lend based on the new NOI, you might need to let it season for a year. That said, if you have a really strong tenant with a long term lease, you might find a lender willing to lend based on that.

Ko Kashiwagi · Answer

Definitely still cash out options out there! Lenders have been more conservative than when rates were lower but worth exploring for sure. Depending on the cash flow and location, you could look into both light doc and full doc commercial financing.

Brandon Croucier · Answer

Hi Ivan,

Happy to connect! Depending on the area I might be able to help.

Ivan Ng · Answer

Thanks, Ned. That is my assumption too so wanted to pick others brain on this forum.

Btw, I like Crab Properties and your logo. My business is Egg Yolk Capital which also grabbed (wanted and unwanted) attention

Ivan Ng · Answer

appreciate everyone's feedback. very helpful and sounded like there will be options to refinance

Ivan Ng · Answer

Will give you a call in the next couple of days

Jacob Sherman · Answer

awesome ! Lets connect and discuss the scenario in full

Jacob Sherman · Answer

for construction is tough to find but for permanent financing 30 year fixed , yes available

Ned Carey · Answer

@Ivan Ng It might be true for that lender or his or her contacts but I doubt it is true in general. Lenders want to lend, you just have to find the right lender for project.

Is CRE cash out refi for income producing property still available?

Is CRE cash out refi for income producing property still available?

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