REFI Problem - need advice !!

[Ivan Shao]

Happy New Year to BP Nation!!

My aunt has a 2 families house that worth 1 million;  1st fl (detached w/ 1 car garage) had been converted to 3 small 1 bd room units ( illegal conversation :(  ) .  She would like to pull out some equity to get into flip house.   To my understanding,  in order to get refinancing to pull equity out of the property;  mortgage company need to appraise the property. There are issues

1.  illegal conversation may cause the appraise value; or even not be able to pass appraise phase.

2.  She has a $90k W2 job but low credit ( below 700 )

I would like to help my aunt and partner with her to final income property or flip a house.  Could BP community throw some advice to us for this situation

Thank you !!

[Chris Mason]

Hi @Ivan Shao,

1. Not going to be any way to know until the appraisal is done. In my market it's normal to see "unknown if the work was done with permits, but this is normal for the market and it appears to have been done in a workmanlike manner." That language typically means that we're fine, it's not an issue.

2. Rental income is qualifying income.