Commercial Multifamily Refinance

[Brian McPheeters]

Hello

I have a 7 unit that is slowly being rehabbed as tenants turnover. Post rehab the rental rates have been increased and are almost at 100% occupancy.

I am wondering when would be the best time to refinance. Can I proceed with the refi now even though 1 unit is not rented and another still needs to be turned over so it can get higher rent once the existing tenant is out? Or should I wait until occupancy is 100% at maximum rents?

Thanks

[Clark Kirkpatrick]

Hi Brian!

I'd wait till it's fully occupied. Since it's a 7-unit, it's considered a commercial property, and therefore the value will be calculated using the income it generates.

This means that if it generates more income, it will appraise for a higher number. The amount the bank will loan you is based on the appraisal number, so if it appraises higher then you can pull more cash out of it.

Good luck!