Commercial Cash-Out Refinance Equity Extraction Calculator
Commercial cash-out refinancing enables real estate investors to extract built-up equity from appreciated commercial assets. This calculator sizes gross new debt, deducts existing mortgage payoffs and transaction costs, and reveals net liquid proceeds distributed to ownership.
Standard Default Parameters
Underwritten Results Preview
Interactive real-time sliders and calculation engine enabled on live page.
Net Cash-Out Proceeds Equation
Gross loan proceeds are sized based on appraised market valuation and allowable leverage limits. Net cash to the borrower represents remaining capital after retiring prior liens, paying exit penalties, and covering title, legal, and origination fees.
Formula Components
Medical Office & Multi-Tenant Clinical Facility
A physician partnership acquired an outpatient facility 6 years ago for $5M with a $3.8M loan. The property now appraises for $8M, and partners size a 70% cash-out refi.
Inputs
Sizing Outcomes
Underwriting Limitations & Disclosures
- Lenders enforce minimum seasoning requirements (typically 12 to 24 months of ownership) before sizing cash-out loans on appraised value rather than purchase cost.
- Cash-out refinance interest rates are often 12.5 to 25 basis points higher than rate-and-term refinancing across agency and bank capital desks.
- All calculated figures are provided for educational and deal screening purposes. Actual lender term sheets depend on full underwriting review.
Frequently Answered Financing Questions
Verified answers to common borrower and broker inquiries regarding loan sizing, guidelines, and execution.
Are commercial cash-out refinance proceeds considered taxable income?
No. Loan proceeds from commercial cash-out refinancing are treated as borrowed debt rather than income or capital gains, making proceeds non-taxable at closing.
Borrowers should consult tax counsel regarding mortgage interest deductibility, which depends on whether proceeds are redeployed into commercial business investments.
Submit Financing Scenario →What seasoning period is required before cash-out refinancing a commercial property?
Most commercial lenders require 12 months of ownership seasoning before allowing cash-out proceeds based on an updated appraisal value.
If refinancing within 12 months of acquisition, lenders usually restrict loan sizing to the original purchase price plus documented capital improvement receipts.
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