Advice on how to find funding for refinance

[Chris Lounsbury]

Hi Everyone!  I am having a little bit of trouble refinancing a property I own and hoping someone has run into this before.

I invested in an over/under duplex 2 years ago and did the BRRRR method. Bought it for cash, rehabbed it, rented both sides and then refinanced. Unfortunately since the property wasn't seasoned, I had a hard time getting conventional funding on it, and instead went with a private company to refinance the property. Our terms right now are 7.95% (adjustable after 5 years) 30 year mortgage. I really want to refinance this property again with a better mortgage now that the property has seasoned for a couple years and is surely rent stabilized. I also want the property to qualify for refinancing without having to use my personal income or tax returns to do so, as I am a 1099 employee and have only been at this job for a year so I really wont qualify.

I talked to a bunch of local banks and they all basically told me that I need to come in person to meet with them.  This doesn't really work with my schedule and it being pretty far away.  I called Quicken Loans and got through about 90% of the process and then they told me I wouldnt qualify because they needed to use my tax returns.  I write off as much as possible in my tax returns so I don't look good in Uncle Sam's eyes. 

Basically, what I need is a bank or lender that can qualify the property by looking at Rents vs debt service.  The property is a cash flowing monster.  It shouldn't be this difficult.  We are bringing in $1700 a month in rent on an $80,000 mortgage.  

If someone has any ideas on how I should handle this, or have dealt with a similar situation, I would greatly appreciate it. 

Thanks!!!

[Chris Mason]

Originally posted by @Chris Lounsbury:

Hi Everyone!  I am having a little bit of trouble refinancing a property I own and hoping someone has run into this before.

I invested in an over/under duplex 2 years ago and did the BRRRR method. Bought it for cash, rehabbed it, rented both sides and then refinanced. Unfortunately since the property wasn't seasoned, I had a hard time getting conventional funding on it, and instead went with a private company to refinance the property. Our terms right now are 7.95% (adjustable after 5 years) 30 year mortgage. I really want to refinance this property again with a better mortgage now that the property has seasoned for a couple years and is surely rent stabilized. I also want the property to qualify for refinancing without having to use my personal income or tax returns to do so, as I am a 1099 employee and have only been at this job for a year so I really wont qualify.

I talked to a bunch of local banks and they all basically told me that I need to come in person to meet with them.  This doesn't really work with my schedule and it being pretty far away.  I called Quicken Loans and got through about 90% of the process and then they told me I wouldnt qualify because they needed to use my tax returns.  I write off as much as possible in my tax returns so I don't look good in Uncle Sam's eyes. 

Basically, what I need is a bank or lender that can qualify the property by looking at Rents vs debt service.  The property is a cash flowing monster.  It shouldn't be this difficult.  We are bringing in $1700 a month in rent on an $80,000 mortgage.  

If someone has any ideas on how I should handle this, or have dealt with a similar situation, I would greatly appreciate it. 

Thanks!!!

You might be able to improve that rate a tad bit using one of the newer residential mortgage programs that base it purely on the property's own cashflow (some of them will go as low as 1.1 DSCR whereas pure commercial wants 1.25), but the improvement wouldn't be sufficient so as to be worth the hassle/fees/costs/etc, knowing that you're just going to be doing it again in a year or two when you have sufficient 1099 longevity to get a Fannie loan.