I own a single-fam worth $450K (owe $300K @ 3.5%) and a triplex worth $775K (still owe $318K @ 3.25%) in Scarborough ME. I am looking for some creative ideas or combination of loan types to put me in a position to buy land (maybe owner finance?), subdivide into 3 lots, build 2 duplexes and a single-fam for myself. Willing to sell, refi or HELOC my current Single-fam, but am not willing to sell my triplex, only access the equity. My wife currently stays home with our 3 children and I work a mid-level corporate job ($76K salary), so my DTI ratio is high.
I have identified 30 properties in my area that are either vacant land or are occupied but make some sense to slice off 7-12 acres for this move. The idea is to understand how to make the financing work on my end and come up with some budget then start approaching land owners with a set plan/offer to see if any of them are willing to sell.
Need some creative ideas from some experts to help me understand how I could make something like this happen. Thanks so much!
Lender · Nashville, TN · Member since 2024 · 700 posts · 284 votes
2y
I wouldn't be selling in this market personally, so if you don't sell the SFR and you really want to do this, a DSCR cash out refinance on the triplex, or a hard money 2nd is your only option to get the liquidity needed to make this move. Heloc's on investment still take into account DTI so that wouldn't work in your scenario.
Real Estate Agent · Atlanta, GA · Member since 2020 · 414 posts · 233 votes
2y
Nick - one option would be to raise funds from a private investor that would be willing to take a second position Lien on the 3 unit. Not sure what the laws are in ME, but in Georgia a first position foreclosure will wipe out the 2nd position lien making them riskier which commands a higher interest rate percentage. I'd reach out to someone in a local REIA where the property is located- those folks will know of some private individuals that are looking to lend.
if the SFH is your primary residence, you should be able to get a HELOC at a decent rate from a regional or credit union. HELOC rates are typically best from the smaller banks that you have a relationship with.
Lending reqs are a little difficult right now to get a line of credit on non-owner occupied property.
Give me a buzz if you have any questions. I'm always down to chat - contact info in bio!