After 2 years, you have a choice... you can either refinance your FHA into conventional (NOO will typically only loan to 75% LTV) and do another OO FHA... or you can buy your next OO place conventional (typically 20% down) and leave your funding as is on the 1st place.

Any possibility you could refinance and pay her off?

Just tell her you know a good mortgage broker who can refinance her.

I can almost bet that your low-ball offer is nowhere where it would need to be in order for this person to just walk away.

And, if you're betting that inflation will eventually kick in at some point and rents will go higher, nothing will do better for appreciation than multi family.

I was looking to refinance to lower the month payment on my mortgage, but I though if I pay of the loan, then it will be better for me, i can get better return and sell in future quickly.

But if its commercial, all bets are off.

In my divorce it says I am to keep the house and try to refinance her name off of it with in 3 years of divorce.

I'd bet the "They bought the call option that is now worthless" and "Too freaking bad" approaches taken by investors engaging in deals like this is why that law exists.I'd bet if you said to these buyers "you bought a call option that's now worthless" that they would look at you with the deer in the headlights look.Having said all of that you likely shouldn't have sold them an option to start with because the investment is not suitable for unsophisticated buyers.

I even spoke directly with the asset manager and they didn't have a good answer other than the policy of cash only for the property was set before it was listed.Now, I don't have the cash to buy directly, otherwise I would then refinance out.