Refinancing loans held by Retirement Plans

[Arpan Patel]

Hey all,

I'm a bit newer to bigger pockets as an active member and I had a question concerning retirement plans and leverage. If a retirement plan owns a rental property (say 5+ units) - leveraged with a non recourse loan - and in the process of renovations and other additions and expense subtractions, the NOI increased. Is it possible to refinance the non recourse loan to another with a higher principal amount in order to recoup costs associated with the build out?

I am not sure and I cannot seem to get a direct answer from any of my professional team members. One one hand, the property is worth more so why not? On the other hand, would that not be compensating the retirement plan for labor (of the owner and others) which would fly in the face of what a retirement plan was conceived for - passive gains? Any thoughts?

Thanks in advance