BRRRR gone bad .. what’s next next??

[Jay Jones]

Hi, I am in a pretty tough spot I have flipped some properties successfully. I decided to do the BRRRR strategy on this one house. I currently have it rented as of March 2022 for $1381 section 8. But when I went to refinance 6 months later I got denied for 30 year fixed loan.

Financials :

I have a hard money loan on it for $106K at 12% interest only, interest only payments start in June. The house appraised for $183K and if I was approve my loan amount would been $137K and I would of got back $18K in cash. My middle credit score is 638 (but I had a lot of late payments a few years back and only 1 late payment in April 2021 which hurt me)

Do I have any other option as far lending someone mention a non traditional loan but it would be an ARM (yikes) so

Any ideas:

*Should I file a notice to quit for the tenants let know I have to sale I’m in the Michigan market  . Put the house up for sale as I would still profit from the deal . (This option just sucks for my tenants) 

* Try to refinance into a non traditional loan 

* go to my hard money lender let them aware of the situation and see if they have options for me?

** option to suggestions**