Need Help Scaling!

[Sean Anderson]

So I feel like I'm stuck and need advice on the best possible route. So I currently have (only real estate) a 2 bed one bath at 815 sq ft home that has been completely remodeled with a recently built a detached 405 sq ft loft style ADU in the back. I owe about $200k (1st mortgage) on the primary with a small equity agreement (second position) and a separate 68K 20 yr renovation loan to build the ADU. 3 percent rate on the 30 yr 1st mortgage, no payments on the equity agreement, and 8 percent on the 68K.

I'm looking to scale/upgrade to a larger home for a second property, but seems like no matter which way I look I'm at some sort of roadblock or disadvantage. I don't make enough to afford a second property without using future rental income and/or using equity. whatever money I borrow, It's expensive now with rates and I'd just be increasing my DTI.

I don't want to cash out refi with a 3 percent rate and increase my term and payments, I can't take a second mortgage without settling the equity agreement in second position, I can't do a heloc either without settling the equity agreement, and I'd rather not give up more equity as my ADU doesn't count when it comes to the equity sharing loan, in that I used the money to build and they don't count future improvements, only the property was which is my 815 sq ft home.

Rates and prices are so high and no matter what I get it will need improvements. I really can't afford any more than the $2k I'm spending all in on the property a month. FYI I will be making roughly $1500 cash flow pre expenses by renting out my home and the ADU if I move on. I can use that towards my new investment if they count it since I have no rental history/profits to show. So that puts me at about $3500-$4k max a month on the second property minus the 1500 rental income I'back to what I currently pay. If I buy a duplex, renting the second unit could help too, but I don't want to rely on that because I will need extra for repairs and other expenses should tenants not pay.

What would you do as a new investor with limited income?