B>How do you pull totally turn around.
tax free money out of your - It is now cash flowing quite
commercial properties, nicely and you would love to tap
without worrying about the into your equity for your next
refinance penalties associated investment.
with your existing loan?
Is your forced appreciation
What is simple with single family stuck in this property until your
Real Estate Investing is much loan is mature?
more complicated in Commercial
Not hardly ...
Property for one simple
It just takes a little
reason...
creativity to pull your money
In Commercial Property, the out.
Pre-Payment Penalties are much
How do you get around the
larger and darn near pre-payment penalties?
impossible to bypass when you
Remember...
want to refinance.
Any money you do pull out is a
Whether your prepayment totally tax free advance you can
penalty on your Commercial Loan use for your next Commercial
is via Defeasance, Yield Property purchase.
Maintenance, or the standard
Here's how you get
5-4-3-2-1 stepdown method ... the there...
dollar amount of the penalty can The secret is to have great
easily run into the hundreds of documentation, strong cash flow,
thousands of dollars should you and use a Mezzanine loan to pull
try to refinance before the end your money out.
of the loan term.
A Mezzanine Loan is an
But what if you are in this additional loan that sits on top
situation...
of your primary mortgage. In
- You have a distressed residential real estate it is
property you have worked hard to commonly know as a Second
Mortgage. Lender, just add in the new loan
You must have strong payments and show them your
financials in order to convince property's cash flow can
the Mezzanine lender to give you adequately cover them.
this extra money because this new
And remember ...
loan will be in second position
Your tenants are the ones
behind your existing actually providing the cash flow
mortgage.
for you to pull the money
The Mezzanine Loan is what is out.
known as a "soft second". The
If your numbers support the
Mezzanine Lender cannot guarantee new debt, you can pull the new
the loan by taking the property loan out now and drop the cash
as collateral because the lender into another cash flowing
holding the first mortgage will property.
not allow it.
And you don't pay any taxes
Documentation is one when your Mezzanine Lender cuts
key...
you the check.
You will need excellent
It is totally tax free
quality records going back at money based on the hard work you
least six months that document did to turn the property around.
the property's superior
performance. 12 months of
This flavor of "refinancing"
documentation is even better.
allows you to pull your money out
Adequate Cash Flow is the in year 2 or 3 rather than
other ...
waiting for 5 years when your
Your Debt Coverage Ratio must loan term is done or until the
also support the additional loan actual sale of your property.
payments.
So, if you have a property
When you put together the that's been under your control
proforma for the Mezzanine for several years and you've made
major improvements in the cash t-728x90.php";
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About the Author:
Learn the Insider Secrets of Commercial Property Investment from Monte Lee-Wen who has personally purchased over $150M in Commercial Real Estate. CLICK THIS LINK NOW to start your Commercial Real Estate Investing Education with his 14 page FREE Report "35 Reasons You Should Invest in Commercial Real Estate". http://www.investortours.com
Article Tags: loan, mezzanine, property
