Anyone doing cash out refinance on commercial? What kind of rates

[Angela Yan]

If someone is doing a cash out refi on their commercial multi units, what kind of rates? Let me know.  

[Chris Blackburn]

We are in the process of entitling several projects(40-120 units)- We plan to do a bridge/construction to HUD. Bridge loan is 5.5%. The new HUD rules let us apply as soon as we hit 85% occupancy. This should give us a 35 year fixed rate currently at 2.5%. We can do a LTV at 85% and this will allow us to borrow back almost all the our and the investor's capital (Total time out 2-3 years). We are finishing up a easy 18 Plex in Keizer Oregon. Our plan is do build easy 3 story 18 Plex garden walk ups on flat, RM zoned parcels in the Willamette Valley. (Salem Metro area, 2nd largest in Oregon). We have a few projects where the owner will contribute the land and we have some of the MEPS who would like to invest as well. The whole plan is to mitigate risk. We typically contribute most of the developer fee. Again- the key reducing as many leaks as possible and getting the project built( our team can do this). Get the project cash flowing, get the investors a return- THEN you earned getting paid. If the interest rates stay low- refi-to funds to the investors (Returned investment, Equity + Payments) and if they are happy- they will invest again. (NOTE- this only currently works with our LOW LOW interest rates) when these go back up- the ability or logic of doing a 85% LTV cash out does not work. Payment is too high. Below are a few of the projects we have completed.