All Forum Posts by: Gregory Doyle

Thank you @Stephanie P.

I am house hacking a duplex that I purchased last year significantly below market due to it being poorly managed, and have since made some minor improvements that allows me to raise the rent to market value.

I recently attempted to do a cash-out refi expecting to benefit from the much-improved income, but the appraisal did not go as expected.

Because the building is 2 units and technically residential, the appraisal came back at $520k using the market value evaluation. The income approach model valued the the property at $700k, but my lender was not able to use the value based on the income approach because of the property type.

I may be grasping at straws, but is there a way to refinance/pull cash out of a duplex based on it’s income value instead of the market value?

@Steven Foster Wilson Thank you!

@Dan H. Thank you for the info! I wasn't aware that NOI/cap was considered primarily for commercial-sized MF properties, I assumed that it would be relevant for any income producing asset. When someone uses the BRRRR strategy for a single family home, isn't rent a major factor in getting the home to appraise for a higher value? Or are they refinancing with a portfolio lender in order to make the rent relevant to the value?

@Steven Foster Wilson do you have any advice on finding a good portfolio lender? I'm in Richmond, VA, and I can do a search for local portfolio lenders but maybe there are lenders you would suggest?

@Brad Hammond @Steven Foster Wilson Thank you both for your responses. Brad, when you say it depends on what type of loan, do you mean refinancing into a conventional vs. fha for example? Or are there other types of loans that would make more sense to refinance with? I'm open to other types of creative financing, just not sure what is available/what to ask for.

I was told by another lender that I can't cash out refinance until exactly one year after original purchase date, but I thought it was 6 months. Each lender has a different answer so far!

Hello all,

I am in the process of refinancing the duplex that I am house-hacking, with the main goal being a cash out refinance. I have significantly increased the rent compared to what the property was renting for when I purchased. The lender I am working with claims that the new rent amount will not affect the appraised value, so it will not appraise much higher than when I purchased. 

Is this correct? I was under the impression that the value of the asset would increase if the rent increased. 

Thank you in advance!

Thank you for your help on this!

Hi Tim,

Thank you for your response, and sorry for the delay in mine! The home was a foreclosure and purchased well below it's value. Homes in the neighborhood of similar SF, year built and updates are selling around $250k, which is where I got that ARV. I am trying to decide if I should keep this as a rental with the option to take out a HELOC in a year or sooner, or if I should just sell it after slowly renovating for 6 months-1 year.

I'm a little confused as to how capital gains taxes will work if I sell. For example, if I have spent $20k between renovation and holding costs by the time I am ready to sell, can I write off all holding costs/renovation expenses? 

Also, do you have an estimate of how much insurance would cost as a landlord? I have home owners insurance, but I assume there is additional insurance required if you have tenants. 

Thank you in advance.

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