Refinance primary with a brand new investment property?

[Daniel Springer]

I recently bought my first rental property, a duplex, with a partner (it is his first as well). I found an awesome deal that I could not get approved for by myself so I brought in a long time friend with lots of cash. We closed the deal as a partnership, he put down the majority of the down payment with the understanding that I would pay him back the rest after close by either taking a HELOC or cash out refinance on my primary residence (worth $550k, I have $380k mortgage, I owe him $40k so this should be a piece of cake). I didn't have time to refinance my place before making an offer, the seller needed to move it immediately. Everything went well with the renovation and getting tenants in, our total expenses are $3000/month and incoming rents are $4800/month.

Now it's time to refinance and I'm surprised I can't get any bank or credit union to do the refinance on my primary. 3 banks have declined my application for the following reasons... All have said that although it's a partnership the entire $3k mortgage payment is considered my personal debt. One has told me that no lender anywhere will ever consider any incoming rents as income unless there is a two year record and they've been reported on two consecutive tax returns (I'm pretty sure this is not true but this was the VP of their entire mortgage lending arm and he was adamant). Two other banks have told me that they can consider 75% of the rents as income (so $3600) but since it's a partnership only half of that is my income ($1800), even though they consider the entire $3000/month my personal debt obligation. Either way both of these scenarios blow up my debt to income ratio and I can't get a refinance.

Do I need to just keep trying more lenders? Am I doing something wrong with the way I'm structured? I don't have any debt obligations other than my primary mortgage and a small car loan and given the lower interest rates at the moment a cash out refinance to add $40k onto my principle would actually result in my monthly payment decreasing due to the lower interest rate. 

[Kevin Romines]

Well, you gotta give it to some people for trying? It should be calculated like this. $4800 in rents X .75% = 3600.00 minus $3000.00 in PITIA = $600.00 in positive income divided by 2, your share equals $300.00 in positive income. If they aren't doing it this way, they are badly misinformed. Go to a lender that consistently works with real estate investors. They will actually know how to do what I laid out. Call a title company, ask what lenders they know that work with real estate investors, and then call them. 

I hope this helps?