first time refinancing and selling a property

[Jeff Patton]

Hey I am needing some incite from someone that has done this before. I purchased a home for 216900 in may of 2016, for us to live in and start our new business of boarding dogs. My mother in law (mom) co-signed to help me get the house. Mom is currently living in our 1500sqft basement. I came up with the idea to sell one of my properties that is 100% paid off to my fiance for 100k, so we could keep our asset and get the money to finish in the basement and 2 bedroom and a bonus room from the carport and garage.  My plan is to put 50k into refinishing our home and utilize the 1031 tax deferral clause with the other 50k.  I am currently going though an application process of a USDA loan of 150k for our business. I am currently full time in my business, will i be eligible for a 3rd mortgage? will the banks see me as unemployed? will i be able to use the 1031 and put 50k down on a new property if i am getting a business loan? will i be able to refinance my current home after remodel and purchase more rentals? I currently have 3 properties 1 paid off with rent at 1000, worth 100k or more. my current residents with 1400 mortgage, and another rental with a mortgage of 1000 renting for 2000, worth over 200k. I want our business to be our first priority but our house keeps running into problem. I recently got shammed by some guys clamming to be AAA septic tank disposal, to have find out from the next septic people i called. im having expensive septic issues and in terrible need of a new hvac and electric is costing us close to 600 a month:(  I am looking for any advice. I am 24 years old in Nashville TN and my goal is to be financially free by age 30 to start my next venture of raising my family.  

[Sam LLoyd]

Sounds like you need to sit down, write out your goals, and then figure out the order to do all these things to get there.  Here are some thoughts though.

Get to a bank and see what you can borrow before worrying about what to do with it... if you can't get the USDA Loan, can't refinance, can't do some of those other things, that will help show you what to do.  So be patient and finish that application process.

2nd.... if you are selling to a fiance, this is not an arms length transaction, and you may run into problems getting money from a bank.... which brings up the question of can she qualify for this loan?

Lastly... I would think long and hard about taking out a loan for your business.  If there's any way you can get the business going without taking on debt, do that.  With a residence, you know you can always rent it.... for that matter, you can always find a manager and contractors if that's what's needed.  For a business, that's different.  You take out money for the business.... you have to work to pay it back, or have a business that makes enough money that you can hire employees to do the work and pay it back... in my opinion taking debt on a business... especially this much, is a big risk/commitment, and does not work with your idea of being financially free in 6 years.

I hope these thoughts help.