Figuring out the next step...

[Robert Boyde Jr.]

Hey all!

My Girlfriend and I got started in real restate investing via house-hacking. We both currently own duplexes in the greater Nashville,TN area (Springfield and Ashland City). My girlfriend purchased her duplex via FHA back in September 2021 and her owner occupancy requirement has ended. Right now her mortgage is just under $1400 a month with her currently leased unit renting for $1150. Once she moves out she plans to rent the both units for $2400 total. I purchased my duplex earlier this year via VA in August with a $1750 mortgage and my leased unit renting for $1400 a month. Once my owner occupancy is up I could rent both units for $2800 total. We both paid around $18,000 out of pocket to purchase these properties/rehab. While the potential outlook on these properties looks good, we feel stuck/at a loss of momentum. Due to rates my girlfriend can not refinance out of her FHA loan (her rate is in the low 3's) and more than likely it does not have the appreciation to get a cash out refinance or HELOC. And since my owner occupancy doesn't end until August 2023... it feels like we are stuck.

So my question for all is some advice. Have you experienced this? What did you do to get past it? What would you do if you were us? 

We are aggressively working to our next step. Right now we are currently looking at moving to private money and trying out a BRRRR in the Birmingham market. Any recommendations or lessons learned would be great!

[Benjamin Aaker]

Have you considered a business line of credit AKA commercial line of credit? Contact the commercial banker at the bank that holds the mortgage for your girlfriend's duplex. You'll need to get an appraisal but might be surprised at how much it has appreciated. She may be able to take out some money on this credit line to purchase the next place. Make sure that the cash flow from the new property also pays this monthly 'loan' it is getting from the current property. If the numbers work, then go ahead. The first step is to contact the bank and get the credit line set up so it is available when you find that new property.