Having problems with a refi of a townhouse rental property

[Trent Dang]

I have a 7/1 ARM with a balloon payment of approx. $100K due 02/19 for an rental/townhouse in MS. Current value is approx. $130K.

I would like to refinance this loan into a more traditional loan so as to get out from underneath the impending balloon payment and hopefully lower my current interest rate of 6.5%. My current lender only offered to place the loan into another ARM and four other traditional banks have denied me altogether because our HOA only puts 8.5% of dues into reserves and they all require 10%. I have informed the HOA of this issue and there is no appetite to raise the contribution to 10%.

I am now considering selling the property as my $1,000 in rent only gets me to break even (high interest rate, HOA fees, property taxes) and there is no appetite to raise the contribution. I do not have $100K in cash to payoff the loan but do have another investment property that I own outright and is worth around $85K with $800/mo in rental income.

I am just beginning to learn and about hard money, etc. lending and am curious as to your thoughts on the best way to proceed.

Thanks in advance!