Opinions/Advice on Backup Financing options

[Logan Koch]

Hi everyone,

I have a current scenario i'd like to get feedback for, if you wouldn't mind.

So currently we are under contract on a 4-unit property we are waiting on underwriting to either approve or deny the conventional Loan we applied for. This would be 30yr fixed, 75% LTV. There is some knob and tube wiring in the property that if shows up on the appraisal report (which i'm certain it will) will need to be upgraded right away based on banks guidelines. Should received that back within next few days. My main concern is the loan falling through at this point. My wife ended up on workmen's comp after a work related injury, so they do not want to qualify her income.

We currently own another property which we are in the process of refinancing after we used a HELOC and rehabbed last summer. This will be into a 25yr commercial loan (bought the property under LLC name, and was told it was good to keep in business name to create business credit history). Now, i don't believe the refi will be done before closing on the current property.

My thoughts was if need be ask for extension on closing, put our 25% down payment, and when refi is done, turn around and use HELOC again to cover portion we were going to finance. At that point plan would be to let both properties stabilize little while so we can better qualify for financing.

Does anyone have any other options? or does this seem like a good back up plan?

Hopefully the normal conventional financing works out the first time. 

Thanks,

Logan