Repair Financing Options/Next Steps

[Paul Meiners]

Good morning. I'm seeking guidance regarding my initial rental property, which requires significant repairs. Three years ago, my wife and I purchased a duplex with a 3.25% interest rate. Presently, we reside on the bottom floor while renting out the top unit. Our monthly mortgage amounts to around $2,000, while we generate $1,400 in rent for the upper unit. Currently, we have approximately $7,000 in savings. Our long-term plan involves eventually vacating our current residence to rent out both units. However, as first-time and inexperienced homebuyers, we overlooked critical issues during the initial inspection. Subsequently, we discovered multiple leaks in the roof, resulting in water damage on the top and bottom floors, including mold growth in our closet on the bottom floor. A contractor assessed the property last week, but still needs to inspect the uppermost part of the roof for additional leaks. Our property features multiple roof levels, possibly with recent wind damage that we aim to validate for insurance purposes. We estimate our property's equity to be between $100,000 to $150,000. In light of these circumstances, I'm seeking advice on the best financing options to address this costly project if insurance coverage falls short. While refinancing is an option, it would almost double our current interest rate. However, it would provide us with the necessary funds for the repairs and potentially a down payment on another property. I'm open to any financial advice you may offer regarding our current situation. Please let me know if further information is required. Thank you.