Acquiring Equity Loan from Property Value without Income?

[Becky Fromm]

Hello! I own a beautiful piece of land in Carson, WA with much potential for short term rentals. The land consists of 9 acres, 1100 feet of creek and two waterfalls, many great trails and even a pedestrian bridge we built ourselves (permitted). On it currently, sits a 4 bd/4bath house (1900 sq ft) that we built in 2018-19. There is $259k left on that mortgage (originally $280k).

Zillow is valuing the property at $745k (I think that is low based on the older and smaller neighboring homes on single lots). Even if that is accurate, it seems there is plenty of equity to be had, but we are having trouble securing a loan for a STR.

My mom lives on the ground floor of the house and Airbnbs the 2nd floor (with it’s own entrance). I own the land and have added my mom to the deed, so we are both on that, but she is the only one on the mortgage. She makes about $35k/year, but after inquires to multiple banks, they are saying her income is not high enough to pull out sufficient equity. I quit an unhealthy corporate job last year, and while I’ve been thoroughly enjoying my respite (I’m currently in Colombia teaching yoga at a hotel in the jungle!), it’s not ideal for getting funding. I can and will eventually work again (I'm an architect and psychologist), but would first like to explore my options that would allow me to develop this investment full-time.

Calculations say I can add a 1bd/1bath, 400 sq. ft. cabin with hot tub for $125k all inclusive.

To the loan officers, between my mother and myself, what are our options to acquire funding based off the equity of the land without having high income?

I’m open to any advice you may think we need in our scenario.

Thank you!

Becky