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Refinance Capital Need Gap Calculator

Refi may not cover needs. This calculator sizes.

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Refi gap (positive = shortfall)

$10,000

Net use of proceeds

$6,810,000

Available cash (if any)

$0

How the math works

Total uses = payoff + closing + reserves + capex. Gap = max(0, uses − proceeds).

$6.8M refi proceeds vs $6.81M uses: $10k gap — near break-even. In stressed market, proceeds $6M = $810k gap requiring bridge or capital call. Plan ahead; surprises at refi are expensive.

How to Use

  1. Enter refinance proceeds.
  2. Enter existing loan payoff.
  3. Enter closing costs.
  4. Enter reserve requirements.
  5. Enter capital need for capex.
  6. Read refi gap (positive = shortfall).

Frequently Asked Questions

Sources of gap?

Expected proceeds below budget (value came in lower). Closing costs higher (title, survey, legal). Reserves elevated (lender tougher terms). Capex need grew during hold (deferred maintenance, new requirements). Typical gap: 5-25% of initial estimate on value-add.

Closing gap?

Bridge loan (short-term). Pref equity (12-18% rate). Seller carryback. Owner capital call. Partial sale. Gap in liquid market: manageable. Gap in tight credit: forces distressed options (workout, short sale).

Planning?

Conservative underwriting. Reserve buffer. Timing optionality (refi when market favorable). Lender diversity (commercial bank vs life co vs CMBS). Don't time-box refi — extend/modify if needed. Flexibility saves value.

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