Here are the details:Bought in 2015Owes - $45kNeeds additional $20-25k as a down payment on the new house for equity.Rate - 6.125% (Adjustable Rate Mortgage) Max is 8%PITI - roughly $700/monthHouse is in great condition so no rehabAsking $175,000, could sell on market for $220-230kRents - $1400-1600How would one structure this deal?

Details below...We need a FAST cash-out loan product that requires only the personal guarantee of my business partner (60% ownership) to be used for: completing the remaining rehab and getting the 1st house rent ready, paying off revolving credit accounts to get her credit score up, and funding the other projects we have in the works.To help bring you up to speed on what's transpired over the 11 weeks we've been in business...We started our business on Dec 1, 2023, leveraged our "then" good credit/high w2 incomes to bootstrap the startup, assembled a rehab team, and are now about 2 weeks out from the completion of our 1st rehabbed property.We've closed on 3 properties, all owned free/clear, and have paid for renovations with personal funds/credit.My credit score was 810, but is now 592, due to excessive debt but 100% on-time payments, therefore can't personally guarantee a loan.My business partner's score is currently in the 700s, but likely wont be for long, due to her revolving credit % continuously increasing, as we push towards the completion of the first rehab utilizing her remaining credit on her CCs.Recently, I started researching the underwriting timeline for DSCR loans. 

Maybe you can adjust your aim a bit, and search in a nearby area.

This highlights that the sector is ongoing adjustments to post-COVID realities and shifting economic policies.  

That is primarily because the cost of money (interest rate) is twice what it was two years ago.I suggest that you adjust your thinking about buying a vacation rental just a bit.

I do not think this is a good plan (the part about adjusting rent of current unit).Why concede rents in a hot market?

All the rain and the freeze/thaw cycles speed up the degradation of masonry work, wood work, paint, and can cause many other issues that don't occur as often in warm, dry climates.Regarding your appreciation estimates: in a C or D area, you may or may not get 3% property and rent appreciation--lots of C and D areas depreciate (without a LOT of data and research, it's impossible to know what the future holds...and even with a lot of data and research, it's impossible to know what the future holds!). 

That first rate increasing is allowing you to grow your wealth it will always balance out in the long run, but can be speed up with a few tricks.  

HOWEVER, your upfront fees will be hefty thanks to the loan level price adjustments (LLPA) on a 90% second home.

As the agent brings in more money, that split adjusts and the agent keeps a larger chunk.