Cash-Out Refi Advice - stuck with a lender on a free & clear prop
Hi Everyone - first time posting here. Nice to meet you and hope everyone is safe and staying healthy!
I have a client who I am working with on getting a property that is going to auction at the end of this month. He owns a rental property free and clear and the lender has no issue giving $300k in a cash out refi but he is running into problems with his income. He is a CEO and large shareholder for a biotech company that is funded by venture capital and government grants, until they get their product approved by the FDA. This is causing them to show a loss on their taxes which seems to be a sticking point for lenders. Their monthly income is significantly higher than their monthly debt and their rental property is paid off.
My question is if anyone has come across this issue with lending and what you have done to help your clients overcome this? The only other option we can think of is to do a hard money loan but it would be a shame not to use some of this equity built on their first rental.