Lien position determines who gets repaid first if a property is sold. A first lien sits ahead of all others; a second lien sits behind the first. When you have a low-rate first mortgage worth keeping, a second-lien loan can raise capital against your remaining equity without refinancing the whole balance.
Refinancing a good first mortgage just to pull out equity can be expensive. A second lien preserves the first and borrows against what's left, sized to the combined exposure on the asset.
Say you bought a building years ago and locked in a low first-mortgage rate. Refinancing the whole balance to reach the equity means surrendering that rate on the entire loan. A second lien leaves the first untouched and borrows only against the remaining equity — usually the cheaper move for a defined, short-term need.
The trade-off is exposure: a second-lien lender sits behind the first if the property sells, so we size second liens to a combined loan-to-value we're comfortable with on the asset, conservatively valued.
BuildUp Capital lends in first or second position against commercial or residential real estate, subject to the total exposure we're comfortable with on the property.
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Related: Second-lien loans · Lending in Colorado