I Need Help Solving This Big Problem W/Duplex

[Richard Swift]

I'll keep a long story short..

So, about a year ago, I came to BP, asking if it were possible to buy a multi-family deal, with the 20'something thousand dollars that I had in the bank. A few people said it wasn't possible, but somehow I managed to make it happen. Sept. 18th, 2018, I closed on my first duplex, 2 homes on 1 lot, in the neighborhood Oak park, in Sacramento, California.

Address: 3501 16th avenue, Sacramento, CA. 95820. 

I was able to put down 4%, with an FHA owner occupied loan, and negotiated to get my closing costs covered( Such a stressful first deal). The total amount of money I have in the deal is around 20k, and I project a 30%+ ROI, once I am able to rent out the home I am currenlt doing a "live-in rehab" on. I purchased both properties for $296k at 4% down(about 15k at the time), leaving me about 6-8k to paint both units, and do some minor repairs, to get the first home rent ready.

Doing a little research through the county, I found out that the 2nd house: 4009 35th street, Sacramento, Ca. 95820, is also it's own official address through the county, but the two homes were sold to me as a legal duplex. My mortgage on both homes, including PITI, is $1,811, which is currently being completely covered by the first house alone, where I rent the rooms out, at $650 a room. The first home is a 3 bed 1.5 bath, 1235 sqft, The 2nd home, 4009 35th street, is a 2 bed 1 bath, 900sqft, which I am currently living in, doing more rehab work on.

My lender just sent me a property evaluation, at a value of $337k, and I'm currently finding myself stuck, unable to pull capital out, to do more deals. I recently just called a few local credit unions, who told me I'd need to wait a few years, to build up at least 30% equity, while advising me to pay more towards principal, each month.

My question is, are there any possible alternative plays here? How can I somehow extract capital from this deal, so that I can go out and either add on another unit to my current live in rehab, or go shopping for my next deal, without waiting 2-3 years? I feel a bit stuck at the moment, and would love to hear your advice BP. 

Thank you for reading fellas! Your responses are greatly appreciated!

Rich

[Brian Ellis]

You still have a good deal on your hands. My suggestion would be get the other unit fixed up ASAP, rent it out and save the cashflow. I would advise doing that before moving onto the next deal, anyway.

 After a year do the same thing, owner occupy a live-in fixer upper with low money down.

A HELOC (85 % LTV owner occupy) might get you close to your initial down payment back. But is it really worth it at a much higher rate?