Having trouble getting a cash out refi

[Tashina Taylor]

So we seem to be running into the same road block. We have a house that we bought cash and own outright. We wanted to do a cash out refi, but every bank keeps saying no due to the fact that we don't have any other income. We ask what about when we have it rented? They have consistently said we need two years' rental income history in order for it to qualify as income.

We've tried every single bank in and out of the area with no luck. There are not any HMLs for rural areas that I could find.

Does anyone have any other creative ideas as to what to do?

[Nathan H.]

@Tashina Taylor

Got it.

If you're wanting to buy something at auction, obviously that involves paying all cash, so your thoughts on doing a cash out refinance make sense.

Here is the first thing I'd do assuming there is no bank or private lender that will work with me:

- Create paper against your house, market the paper for sale. There are a lot of note buyers out there that are interested in buying notes at discounts (or perceived discounts) secured by real estate. Create a note for 60k, 6% interest only payments, with a 2 year balloon and there is someone who would buy that. It's just a matter of finding them (craigslist and investment groups are a good place to start).  

- This is a lot more challenging, but the next thing I would do is create paper and use it as the downpayment and ask for seller financing for the rest. This would involve a lot of searching for the right seller though and being able to articulate the benefits to that seller. 

I think the biggest hang up with finding people to do creative deals is that they 1. don't understand it and 2. don't want to deal with it anymore. I'd make the maturity of any private financing short, betting on your ability to refinance once you get rental income on a tax return or two.

PS. There is a group of brokers that are highly sophisticated in this stuff. It's known as equity marketing. The group is called the National Council of Exchangors.