For Texan's multifamily (duplex) cash out refi--> Golden ticket.

[Jason Pavloff]

For over the past 11 months I've been tiring to figure out how to keep my first property, a house hack duplex, and somehow pull out cash/equity to BRRRR. However, it was damn near impossible, well at least here in Texas! I tried calling 10-12 different loan officers who first told me, "ohhhh no problem," only to be let down. It turns out as most of you may or may not know, it just isn't possible to do a cash out refi due to the Texas 50(a)(6) law, since it was my only property.

Well then one day I saw how a few, not many, were doing  Condo Regimes on their duplexes..? And that got me thinking... really thinking! I first found out not only could I get more money for selling my property... from  $500K-525K -> for selling as a duplex. To $620K -650K if I spit each side into a condo and sell for $300-325K a side! This got  my wheels  turning even more! 

Here is the GOLDEN TICKET. One morning I was thinking... Well if I split the property into a Condo Regime, where each unit is it's own unit with it's own loan. Why couldn't I know do a cash out refi now on just the side, the side I live on?!?!  Well according to a few lenders, Quicken being one of them.  Why yes, yes I can... Brilliant idea! Now it took about 20min to explain what I was doing to the loan officer, because this  almost is never done in the loan industry on two different levels.

 I've  basically got one loan for $325K with Pennymac, now after using a lawyer to split the property into a Condo Regime, I have to re-apply for two different loans one of each side for $162K. Where I will then do a cash out refi on side B, the unit I live in. Thus keeping my original property and giving me money to find my next. 

Now my next move, if I couldn't do this cash out refi, was to sell both sides which I've owned for 2 1/2 years and look for an apartment complex around 15-30 units. I've been looking into literature on what to look for do's and dont's for newbies in this whole process. If anyone knows if Brandon Turner posted a write up on this, that would be greatly appreciated. @Brandon Turner

[Robert Pfenninger]

Loan Officers get paid per application, not per loan approved. Which is why they will usually be all to eager to tell you your circumstances “won’t be a problem.”