Land contract to refinance

[Corbin Jones]

Hello BP,

I am buying a duplex on land contract in Wisconsin (seller financing) for 8.25% interest. The term will be 30 years. This is not my first property, but it will be my first time financing through a land contract. I'm putting only 5% into the deal, with no closing costs. It will cashflow fairly well and will generate a higher return for my money without weighing down my DTI since it won't be reported to the credit bureaus.

I would like to refinance out of the high interest rate into my personal name or into my LLC that I recently created, which I'm sure would require commercial financing at a higher rate than a loan in my personal name.

How would refinancing out of this land contract work? Do I need to have 20% - 25% of the loan paid off before refinancing? Would I be looking at a rate-and-term refinance or a cash-out refinance? How does the bank view these things? The lender is a very close acquaintance of mine and we're going to write contracts and follow legalities, but we're both flexible on how it's structured.