Duplex Financing

[Tavis Ostman]

I purchased my first duplex about 9 months ago, Im usually a Fix and flip investor of SFR but the timing and deal on the property seemed right.

After taking 90 days to rehab the units, I listed them for sale at a fair market value and since have reduced the price over the last 6 months to what I feel is  as low as I want to go.  At his point Id rather rent the units and collect the income than fire sale them.

That being said I have no mortgage on the property and a good deal of capital I usually use for my other "flip" projects tied up in this property.  My first thought was to get a loan on the property to extract the equity and the income from one of the two units would more than cover cost of Mortgage, taxes, insurance etc.

The problems I'm running into is,

A: The property is worth substantially more than I paid for it 9 months ago as I bought it as an uninhabitable bank owned foreclosure, which seems to throw up TONS of red flags with Mortgage Brokers / underwriters I'm told.

B: I current have it listed for sale, even if I pull it from listing, the mortgage brokers want to again red flag it

C: As my experience is Fix and Flip I don't have experience as a property Manager per se and the lenders I have spoken to all want you to have 2 years history.  I have been a landlord  10 + years ago, which is why I avoid it and will hire a Management company for the property if I rent it.

D: If I'm keeping the property, I would like to keep it in my LLC which seems to have its own set of financing challenges. I can accept the idea of higher interest rates but, feel like its the challenge of being 18 all over again with no credit.

Any Ideas or suggestion  ?

Thanks,

[Jerry Padilla]

@Tavis Ostman

If you are thinking of cash out refinancing...... The house would have to be off the market for 6 months. 

A couple things you can do are...... Get cash out private financing and then rate and term refinance it. Still, to refinance it, the house would need to be off of the market. 

You won't need a two year history if you one your own home. 

The house would need to be in your personal name for conventional financing.