How to approach buying 2nd duplex

[Charles Smith]

Hello BP! I own a Conventional 5% down, home possible duplex (I live on one side). I bought it seven months ago for $405,000. I've since put $40k into renovations, raised the rent significantly, and placed new tenants. My current mortgage balance is $380,000. The comparable sales in my area for an updated duplex similar to mine is $540,000. So far, all the banks I've contacted won't use the rental income to qualify me for a HELOC, because it hasn't been two years. My original plan was to get a HELOC, and buy another duplex at my one year mark. I am at a roadblock in my thinking. The only option I see right now is to use the cash flow once I move out, to pay down the renovation cost. I could definitely use some mentoring and would love to connect without someone whos been in my shoes.

Can I buy another owner-occupied duplex with an FHA loan or would I have to refinance out of my home possible loan first?

Would a cash-out refinance be possible? In order for me to take some cash out and pay some or all of the renovation cost off.

[John Warren]

@Charles Smith I would probably pursue a cash out refinance, although I am not sure you have enough equity to get much out. This is a frustrating part of the journey for sure. You may consider refinancing out of the FHA loan so you can put that tool back in your tool belt. Don't get discouraged whatever you do. So many people never take action, but you have made the first step. Now hopefully you can find an amazing, investor friendly lender to guide you through the next few steps.