Commercial Loan Refinance

Cash

10% hard equity (cash down or cash previously contributed) is what most commercial hard money people consider reasonable. For loans against quality commercial property, hard money professionals will usually lend up-to 50% of the value of land, 60% on vacant buildings or buildings with insufficient cash flow and 65% on income producing commercial buildings such as multi-family, office or retail.

Experience

First time investors scare loan officers.

Exit

Hard money lenders are not lend-to-own lenders; they don't want to take back your property. Investment and loan standards have tightened up across the entire commercial real estate finance industry.

Even Hard Money Commercial Mortgage Lenders Have Tightened Lending Standards

The Discounted Cash Flow method is the traditional system used, which essentially compares the existing loan vs. the proposed loan on a Net Present Value basis. How the refinance will affect their monthly cash flow? 2. What the closing costs will be?3. (If increase in cash flow) What the principal pay down (amortization schedule) will be, compared to existing loan.

Cash FlowMost borrowers are obviously interested in improving their cash flow situation when refinancing. On a refinance, the borrower can normally roll most of these’s costs into the loan amount. For example, if the new loan monthly payment is $2,000 lower and the total closing costs are $10,000 it will take 5 months for the borrower to “break even”.Principal Pay DownPrincipal pay down is obviously another important component of any commercial loan.