Refinance

A refinance retires the existing debt on a property and replaces it with a new loan. In the context of seller-financed acquisitions, the refinance is the primary exit strategy: you acquire with seller financing, stabilize and improve the property, then refinance with a DSCR lender or community bank to pay off the seller note and potentially extract equity. The refinance amount is based on the new appraised value (NOI / cap rate for commercial; comparable sales for residential). Timing is driven by the balloon date on the seller note and the property's seasoning and occupancy requirements. Always start the refi process 12-18 months before the balloon date.