Question regarding my options

[Jefferson Harmon]

I bought my first investment property last Dec. My goal was to have the rehab done by May at the latest. Due to the financials I wasn't able to get it on the market until late July. It has been under contract three times. The roof has been the biggest concern for the buyers. My credit score has gone down significantly because I had to put a bunch of the costs on credit cards and have been late with a lot of payments. We originally had the house on the market for $399,000. It is currently listed at $343,900. I am considering a cash out refi but don't know my options with my credit the way it is. I am seeking advice from this community to help me brainstorm ideas. 

Thanks in advance!

[Sasha Mohammed]

my assumption is that you are attempting to sell to someone who intends to live in the home. If that's the case, i would suggest you stop with price reductions and begin offering seller credits instead. 

I'll give you an example - a $10k price reduction for a buyer planning to put 20% down will save the buyer $2k in cash. that same $10k as a seller credit saves the buyer $10k in cash (seller credit can be applied to closing costs for example). it's the same net proceeds to the seller, but makes a much bigger move for the buyer. Also, if the buyer wanted, they could apply that seller credit to buy down their interest rate, potentially increasing their purchasing power due to DTI. there are limits to this, and its dependent on the loan the buyer is attempting to take out in order to buy. but you can talk to their agent or loan officer about how to best structure the sale in a mutually beneficial way.

cash-out refi is not a bad way to go, if the property debt covers with a tenant in place. but as @Caroline Gerardo said, this could be a pricey solution if you don't intend to keep the property long-term, as you'd be paying points to obtain the loan, which may have a prepayment penalty. 

just to throw it out there, i do have one lender for properties in CA or TX that is allowing for fantastic interest rates on DSCR with NO prepayment penalties (i think they start in the low 6's)... its a 6 month ARM, so it adjusts pretty aggressively, but something LIKE this could be a good fit as a short term solution until you have better traction selling the property. there are options out there, but its all a trade off. I suggest reaching out to an experienced, investor-focused broker who might be able to guide you into the best loan option for your specific scenario.

Best of luck!