Define the reason to refinance

A maturity, acquisition of a partner’s interest, planned renovation, cash requirement or change in ownership plans can prompt a review. The best structure depends on the purpose and the property’s ability to support the loan.

Calculate the net result

Compare proceeds after payoff, prepayment charges, fees and reserves. Include future payments, guarantees, extension conditions and prepayment flexibility over the expected holding period.

Use the property’s actual financials

Compile operating statements, rent roll, leases, capital spending, existing debt and the proposed business plan. Compare lender assumptions with your own, including taxes, insurance, vacancy and required improvements.

Review the property-specific considerations

Separate the closing result from the ownership result

A refinance can deliver cash at closing while increasing ongoing debt service or restricting a later sale. Compare the net proceeds with the change in monthly payments, recourse, reserves and prepayment. The decision should reflect how long you expect to own the property and what you plan to do during that period.

For a property with near-term lease expirations or planned renovations, flexibility may matter as much as initial proceeds. Discuss those events before selecting a lender so the loan structure accommodates the actual business plan.

Understand why lender proceeds differ

Lenders may use different assumptions for vacancy, expenses, tenant rollover, capital needs and value. Request the underwriting behind the proposed loan amount, rather than comparing proceeds alone. A difference in the treatment of income can explain more than a small difference in the quoted rate.

We compile the financing materials, approach relevant lenders and help compare proposals on a common basis. The review covers the money available at closing, the obligations during ownership and the cost of repayment.

Discuss your property financing or explore sponsor consulting.