stuck with construction financing

[Sol Dubnov]

Hi,

We've purchased a 2 unit fixer in cash as an investment but can not get a loan for remodeling it even though we have equity in the property. We own a primary residence on which we make mortgage payments. The reasons for not being able to get a loan is that the banks would not consider future income on an investment rental for repayment capability. And for some reason this being a duplex makes it even more difficult..

We thought to rent out our current primary and move into one of the 2 units, but the banks would not approve it since the new units are smaller then our current home.

So we are considering selling our primary residence in order to qualify for a new loan, but I was wondering if there are more creative solutions for our problem?

thanks,
Sol

[Ralph S.]

Don't know the details of your 2 unit fixer (how much you paid, how much work it needs), and don't confuse me stating this with recommending this, but in addition to Jon's suggestions...

HELOC on your primary residence (but it sounds like you have already hit your DTI (Debt To Income ratio).

Personal Credit Cards. Not what I would recommend.

Attend Real Estate Investment Clubs in your area. That you own it outright, and if you can convince someone you have a plan and can do it, you might find some private money.

Above all, IMO, you need a financing plan. How and when you'll be able to get from short term financing and into long term, if you plan on keeping it.

Lotta people out there today who planned to exit their low interest ARMs before they reset.......