Refinance from owner finance and build on vacant lot

[Dante Devine]

Hello BP, new member-ish. Dante Devine, I am a real estate broker in Houston and a Flight attendant based in San Francisco. Currently scouring both markets to see what strategies are best in each. As for now, I am in a bit of a pickle and need some advice.

Ok ok ok, Myself and a business partner bought a duplex and a lot next to the duplex in Houston earlier this year and owner financed it. We both have great credit scores (above 750) but very little income between the both of us. Because of that, conventional financing was not an option. We already own a townhome in the city under an FHA loan that is leased out but we are only breaking even on it. We lived in it for 5 years then both ended up traveling so it made sense to lease out rather than have it sit there.

Questions

1.) Our owner finance is at 12% and eating into the profits. Currently we are cash flowing at about $180 per month. If I can bring that interest rate down to 5%, that turns into roughly $550 cash flow which is obviously much more desirable. We owe about $71k on the loan and don't have any real money to put towards a 20% downpayment to refinance even if a bank would give us a loan. The home was appraised at about $85k when purchased. The owner financier wants out because she has another project she needs the full amount for, we want out because we need a lower interest rate. I believe she owes about $40k to $50k on her existing loan in place. We can probably get a relative to hold the financing for us at no extra cost to us, but how can we get the desired financing without having to come with a large downpayment?

2.) The lot is vacant (as I guess lots usually are :-). We would like to put another duplex on that lot but construction costs are bringing our total to almost $150k, and this is for a roughly 2500 sqft structure manufactured duplex sitting on pier and beam. I bought the lot and the existing duplex for $83k total. Is any one aware of where I might be able to purchase something cheaper and any ideas on how I might finance it?

I know some of what I am asking may not be possible without getting more money to play with, but I thought I would ask anyway in case there is something out there I might not have heard about. Thanks in advance for your responses.