Cash Out/Refinance Investment Rental Property

Anonymous · ‎02-22-2008

A few years ago I inherited several pieces of property, including two rental houses, raw land and a mini-strip mall (9 store fronts) which I own free and clear (nothing owed). One of the properties is in desperate need of repairs. Looking to obtain a $10,000 - $15,000 loan. I thought having assets would secure some sort of financing, however I haven't had much luck. Most hard money websites I visited will not lend such a small amount. The properties all have a combined value of around $400K. Short of selling, are there any options for me at this point? I don't have a business partner, but my mom is willing to assist me in getting the loan, but she's retired and on a fixed income. How would that effect obtaining funds? Her score is 680 EQ, 714 EX. HELP! Thanks a lot!

519 EQ

(Others probably are just as bad but I haven't checked yet.)

Anonymous · ‎02-22-2008

glamourgurl63 wrote:
A few years ago I inherited several pieces of property, including two rental houses, raw land and a mini-strip mall (9 store fronts) which I own free and clear (nothing owed). One of the properties is in desperate need of repairs. Looking to obtain a $10,000 - $15,000 loan. I thought having assets would secure some sort of financing, however I haven't had much luck. Most hard money websites I visited will not lend such a small amount. The properties all have a combined value of around $400K. Short of selling, are there any options for me at this point? I don't have a business partner, but my mom is willing to assist me in getting the loan, but she's retired and on a fixed income. How would that effect obtaining funds? Her score is 680 EQ, 714 EX. HELP! Thanks a lot!

519 EQ
(Others probably are just as bad but I haven't checked yet.)

Not sure if your mom is much help unless she's on title to the properties - you can't borrow money against a house you don't own and if your mom signs on the loan, she's borrowing it too.

At a 519, the only thing I could recommend is perhaps taking a larger hard money loan than you need and using some of the proceeds to pay it right back down.

Anonymous · ‎02-22-2008

Actually I think my mom and I are co-owners of the two rental houses. Would that make a difference? Or would it be simpler just to have my mom apply for a personal loan at her bank? How would her income be verified if she is retired? Could her last known salary be listed on the application? Are her scores (680 EQ, 714 TU) high enough for a $10,000 loan? Thanks again for your assistance!

Anonymous · ‎02-22-2008

In that case, it would make more sense for your mother to refinance on her own assuming she qualifies with her DTI. A refinance is better than a personal loan because the interest is tax deductible on the rental property (as a business expense). Based on her scores she could qualify for a investment property refinance and not go the hard money route. You can't use past salary information for qualifying, but she can use any fixed income (social security, pension, retirement, etc.) that the lender can verify. She can also use rental income (do you have tenants?) for the property at 75% of the monthly amount stated in the rental agreement. A $10k loan would depend on the value of the property but it sounds like the loan-to-value would be lower than 50% and in that case it would be fine.

You should be able to keep your name on title if she refinanced.