Looking for some refinance options

[Daniel Kokodoko]

Hello BP community, I'm looking for some refinance advise/options. Any help from experienced BP investors is really appreciated.

My business partner and I are currently completing a new construction in Austin, TX (completion planned near end of February 2023). The property will be a Primary unit and a ADU unit, each with its separate address. Our Plan A was to sell both, but with the softening of the market, we are preparing for our Plan B, which is to keep both units as rentals (minimum 5 years or until the market improves). We are exploring using one of the unit for Long Term Rental, and the other one as a Medium Term Rental. The rents comps in the area for LTR show we could get around $4500 to $5000 combined monthly rents for the 2 units. With Texas high property taxes, cash flowing may be a challenge...

We invested around $400,000 cash to buy the land, pay for permits, design, architecture, etc.. We took out a construction loan from a bank to build. Building costs should come in around $550,000 when all done. (Building costs are high in Austin, and we probably would not recommend the builder to anyone). So all in costs, about $950K for the 2 units. With any luck we anticipate both units would appraisal for a combined 1.1 or 1.2 million dollars. 

We are looking to refinance the units, to pay off the construction loan, and ideally take as much of our cash out as we can and still cash flow. My partner and I are both have W2 jobs, good income, good credits (740+), although I already have 3 mortgages on my record (2 investment properties and a primary home). What are our refinance options in today's high interest rates environment? Our primary goals would be to take some of our cash out, but at least still break even for cash flow.

We do have an option to convert the existing construction loan into a long term mortgage at 5.5%, however the caveat is, we don't get to take any of our cash out. This would make our ROI pretty miserable, but we both are ok with this scenario if we can get better rate somewhere down the road.

Thank you