Commercial Real Estate Loan Refinancing: What It Means and Why Investors Do It

[@noahd2235]

What if you want to hold for 40, 50 years... etc

[@financialmodeling]

Well then you probably don't care about short-term gains from refinancing...

[@Rafacarv0]

Why would the lenders want to redeploy their capital? They are earning their high interest rates on top of a more valuable, derisked asset. Right?

[@financialmodeling]

Different lenders target specific risk / return profiles. A lender that specializes in construction loans doesn't necessarily want permanent loans, and vice versa (or even if the lender does both but wants to maintain specific percentages in each one).

[@siboju1996]

where is excel file

[@financialmodeling]

Click "Show More". Scroll down to Resources. Click the links there.

[@Kakakaken]

Hi the excels are no longer valid, can the links be updated? thanks!

[@financialmodeling]

They should be working again.

[@ryanwhitley4627]

Hey this may seem really crazy but would you be against emailing me a copy of the spreadsheet ? If so my email is [e-mail] Great content !!

[@csanton3946]

In all hinesty this isnit a good practice, it only shows how you treat an investment which is a hot potato. By putting so much leverage and always refinancing, you are effectively putting all the risk to the debt holders or debt investors and you dont care what happens in thr business when business conditions change to the worse because your equity investment due to high returns are already recouped or you are derisked already and any additional income is just a bonus. If the business burns, the one who willabsorb those losses is the debt holders. This is corporate america, milk it to the core. I do not know whydebt holders eould even want to be inthat position of assuming all the risk while your equity partner is enjoying, i guess its because refinancing allows the transfer of risk from previous debtholder to a new debtholder while thepotato is still hot

[@financialmodeling]

I am not really sure what your argument, question, or comment is. Refinancing is common in all real estate and other asset-level finance deals. Lenders know the risks they are taking going into the deal based on the LTV, coverage ratios, etc.