BiggerPockets

I found that refinancing can be more challenging than using purchase-financing. Naturally, it will depend on your credit score, LTV, employment history and status. Possibly a lower LTV on a rehabbed house should be easier to obtain.

Jon, you painted a dire picture. Would private money be easier? I know that's a more inefficient market, but are cash out refis getting done with private money?

While I totally agree that the lending market has changed drastically in the past two years... if the subject of refinancing is approached correctly... there are many lenders who will do these deals.

The key is finding the right lenders and creating a relationship with them prior to needing their money.

Many investors have either tried to obtain funding using mortgage brokers or by approaching large institutions like BofA or Wells. This doesn't work. These banks are too big and in almost every case you will be speaking to residential loan officers who in my experience don't know what to do with investors.

The approach that has allowed me to obtain funds almost at will... yes even in todays market, is to create relationships with commerical loan officers of small local banks. These banks will have Savings and Loans or Community Bank in their name... and they keep their loans in their portfolio, allowing them more flexibility in their underwritting.

I will post an article on this subject later today outlining the steps every investor should take to create these critical lender relationships.

Pete

Even some local banks in my area have had there commercial investments curtailed. Peter gives good advice about local banks though. That is where you MAY find a HELOC or a commercial loan. It is possible to also do blanket financing on the commercial end with some local banks, but from my experience in my most applicable market at least they want 5 properties minimum and preferably more.

I think you need to make sure that you are buying right and creating actual value with the rehab, and then sell the duplex to another more passive investor as a turnkey property for a decent gain. Make sure you establish an LLC and that it takes title before you sell it so that you can get all tax benefits of a company.

Talk to a CPA that specializes in RE to find out what to do to reduce it and repeat the process. As you gain more property and thus income, you will likely be able to get financing based on your company's income, not your personal situation.

Go talk to local commercial officers now to find out what would be best to do. I would also suggest that you establish an account with the bank or banks you want to do business with, both personal and company. If they see the income coming in to their accounts it should be easier to get the loan eventually.

Remeber when times get tough it forces the tough to get creative.