Board Topic: How To Capture Equity In Commercial Property?
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How To Capture Equity In Commercial Property?

Posted by: Tony Oct 21 2004, 07:23 PM
I currently have about $50,000 worth of equity in a commercial only building. What I mean to say is that it just appraised in Sept 2004 for about 50K more than what I owe. Is there any way to capture that equity to use on other purchases or business ventures? My bank has already told me that they will not do an equity loan on a commercial property. Thanks in advance!!


Posted by: loanuniverse Oct 22 2004, 07:50 AM

Probably not, and if you can it is going to be expensive. The important piece of information missing here is how much was the property was appraised for. Cashing out some of that equity {not all} might be possible if the remaining is going to be about 20% of the value. However, if you are already under 20% with $50,000, then it will be difficult.

Transaction costs are something to consider when you are talking about such a small amount money. Do not think $50,000, as you will definitely not be able to take all the equity out

Posted by: Commercial Lender Oct 23 2004, 09:43 PM
Depending on when you bought it you could refinance (most lnders require that you own a propety for aleast 12 months before refiing). Depending on your loan amount, you closing cost will be about $8-10K. Also keep in mind that an appriasal value is not carved in stone. Every lender has a Real Estate department that may look at the appraisal and cut the value. Another consideration is LTVs....U may not get a high enhough LTV to cash out.

Admin is right...just the tranaction cost alone is prohibitive. I dont think its worth it.

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