Refinancing Commercial Property for More Cash

[Robert L.]

Hi everyone

New to this forum and couldn’t find an answer so here goes. a few levels to this question and appreciate any input.

I am “inheriting” a commercial property of my parents — they are planning to transfer company ownership to me this year. They took out a commercial loan on it many years ago and have about 3 years until loan maturity.

The property is worth considerably more than it was when they first financed (IE like double or triple) and rental income is up about 30-40%.

I am interested in refinancing to get extra cash out for other endeavors.

So my questions are:

1. If there is any benefit in just refinancing with our current bank — what fees, if any, can be avoided? I imagine that during refinancing it’ll be like starting the process all over again IE getting a new appraisal, then reviewing all our taxes, rent rolls, etc, so why not just shop around?

2. Next and more complex question would be if because of my new ownership situation (IE our previous years taxes don’t even reflect me as owner yet) I’d be better off just starting fresh with a new bank. Will either the current bank or new lenders care or be weary that the property just got transferred to me, some newbie owner? FYI my own personal finances are rock solid. But this is a major reason I haven’t personally approached our current lender because they technically don’t even know that ownership is being transferred to me and I worry that it’ll Piss them off somehow.

FYI this is an LLC.

3. This is the most oddball question but maybe someone has experience with ownership transfer. Per our accountant all we have to do to transfer ownership from my parents to me is report the company taxes accordingly this year to reflect my ownership. That and we plan to just scribble something down at a lawyers office. Im surprised that’s all that is involved. Does a bank want anything further than this??

Thank you all very much in advance.

[Eddie Reid]

hello Robert ,if your bank can offer you a good rate go with them ,you will always being paying fees,  some lenders fees or more some less,yes  the lender will be ordering the appraisal for you. No the lender or your bank will not  be weary of the property being transferred to you .No you will not be pissing off your lender in trying to get a loan ,they will welcome your business.All you parents need to do is to transfer ownership to you ,a good atty can facilitate that paperwork for you