Land Contract to Traditional Mortgage to Improve Cashflow

[Brennen Waldron]

In 2021, I purchased 3 residential properties through a single land contract deal (2 SFHs and 1 Double). The sale was 121,400 @ 2.5% for 10 years. This breaks down my mortgage payment to be around 1,200 a month, with about $400 in expenses. My total income on the duplex is $1000. I live in one SFH and the other SFH is uninhabited and temporarily my business' shop and storage (general contractor, full time). Since this sale, I had a hard time finding a bank that understood the Land Contract when I was purchasing another additional property a year later . Luckily I did and now I own and rent another SFH. ALL of these properties are adjacent to each other and are situated in a very unique part of a growing downtown.

The duplex and my house were very well maintained and in great shape thus I have done absolutely nothing in regards to improvements. My intentions, over the next few years is to: 1. Bring the duplex to market rent (From $500ea to $800ea). 2. Totally gut and renovate the uninhabited SFH to rent. ($1,100 rent) 3. Add major improvements to the duplex (roof, HVAC, kitchens, etc.).

With all this is mind, would it be insane to take my land contract ($95K balance) to a bank and get a traditional mortgage? The reason is to lower my monthly payment (virtually in half) and most importantly have easier access to drawing HELOCs for these improvements as time goes on.

I found a bank who gave me a quote for 6.5%, 30yr fixed on each of the properties. I am getting killed in interest but am I better off improving my cashflow?