Hi All,  I am trying to figure out my debt to income ratio for a FHA loan, if I have a private debt meaning I owe a friend some money and I am paying him monthly.

I am not good with this for several reasons including I am personally responsible for this debt on paper, but he is going to benefit from continued ownership of this property, improved revenue and cash flow from this refinance and I am taking all the liability.

If you wanted the property back, set the opening bid as high as you legally can, which would be the total debt owed (UPB, arrears, late fees, plus trustee and attorney fees, corporate advances, etc).

Outside of real estate investments we are a strict Dave Ramsey no debt household so this decision seems counter intuitive to everything we've worked so hard to accomplish.  

I filed an object for the discharge of debt related to the property. 

Everyone went to college and took on a lot of debt.

My thinking is this...pull 35k out of my 401k, sell a car and pay off the rest and also pay off all credit debt to bring down DTI, Refi my home, use some of the money to do some upgrades, rent out and then doing it all over again.

If you have long-term, documented income (W-2), credit score over 700, and your debt-to-income ratio is low, you stand a pretty good chance.

I live in southern NH, I've been in construction most of my life, the last fifteen years in heavy highway construction as a sales/estimator.I love to restore things, houses cars boats etc..

That potential gain measured against the additional cost of your debt at the higher rate is how I would approach your question.