One of the requests we have often gotten has been from borrowers wanting to pull “max cash-out” off their commercial properties. What you run into is two difficulties:
- Almost all lenders want a source and use of funds and saying, “I want to invest it” doesn’t fly with most lenders; they want it re-invested in the property and
- Almost all lenders limit the amount of cash-out they will allow.
Example:
Mr. Jones, who owns a $3,000,000 property free and clear wants to borrow $2 Million dollars for investment – he finds it tough going. Even local banks want a source and use of funds and limit the cash-out. BUT WE CAN GET THAT DEAL DONE!
Now there are rules of course:
- The property must debt cover at 1.2
- The LTV needs to be 80% or less
- The borrower needs to be solid
- This is ONLY for deals over $1,000,000
Mr. Jones’ property debt covers at 1.25% (yes this is a real client in our pipeline – though a different name). So the property can handle the mortgage payment on this new note and there is STILL profit left over. And that $2 Million is his, no questions asked.
But it gets better. You see, that property with no mortgage on it turns out $200,000 in profits that Mr. Jones gets taxed on! That is a big tax nut. With the mortgage, the profit he makes roughly equals the depreciation he can write off.
So not only does he get $2 Million cash and the property pays for it, the profit he does make becomes tax free! (If after all expenses and the new mortgage he makes say $40,000 a year profit on the property and Depreciation equals $40,000 then his taxable income is zero). The $40,000 profit is tax free. SWEET!
Do you think this product might help you refinance one or more of your properties? We can go up to $30,000,000 for a loan amount!
THIS IS ONE OF THE BEST PRODUCTS ON THE MARKET TODAY! PLEASE REMEMBER THAT RATES AND TERMS WILL VARY BY LOAN SCENARIO – THE STRONGER THE DEAL, THE BETTER THE TERMS
So, if you have any loan scenarios that you would like us to look at or if you have any questions or want more information, please give us a call at:
863-298-8900
or visit our web site at:
http://CommercialLendingPros.com
Commercial Capital, Ltd.
Your #1 Source for Commercial & Business Financing
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