How do I buy out my tenant in common?

[Bryce Filho]

Hi BP Members!

I own a SFH 50/50 with another person. He is wanting to sell and move to Seattle for his new job, but I want to keep it because it is a great long term positive equity and cash flow rental. The problem is, I don't have the cash to buy him out and an equity cash out refinance is not an option (so I was told) because it would leave the loan-to-value below 20%. $250,000 mortgage remaining, $350,000 value, so $100,000 in equity. I would pay him $50,000. Meaning I would need a new mortgage of $300,000. That makes the loan-to-value of 14% (300,000/350,000).

My mortgage lender suggested I do an equity cash out refinance and take out a personal loan to cover the rest of buy out.

I have been calling portfolio lenders in a frenzy this whole week as a possible alternative, but are there any other options that I should consider?

[Ellis San Jose]

You could offer to make payments & your partner could have a secured second Trust Deed on the property.  When the equity is sufficient you could refinance at that time & pay them off.