Need help getting equity out of a Duplex
Hey I hope everyone is good! I am very curious to see if anyone out there can help me access some equity in my duplex. This is my first time doing it and these are the issues I have ran into so far, if anyone has any advice or services to offer I would love the help!
1. Won't lend on the whole duplex because my primary residence is only for half of the property.
2. They do not like my AIRBNB income
3. Then a couple of the banks would not touch it because it is a multi - family property, and the only work with single family.
Are you planning on using that equity to buy another primary and keep that one as a long-term rental?
You can get a conventional loan cash out up to 75% LTV, any lender can offer this. If they don't or wont due to the fact that its a duplex, its because they as a lender have an overlay that Fannie Mae / Freddie Mac doesn't have? There are also lenders that will give you a HELOC up to 80-90% on this. Do some searching, you will find the best lender.
As far as Short Term Rental income, most lenders can not count the income until it shows up on your tax return. Do you have 2021 tax return with this income showing up on it. If so, it should be counted. If not, the appraiser will show what the market rents are (long term) and you should get credit for that rental amount.
I hope this helps.
Quote from @Erik Estrada:
Are you planning on using that equity to buy another primary and keep that one as a long-term rental?
Yes that is the plan!
Quote from @Kevin Romines:
You can get a conventional loan cash out up to 75% LTV, any lender can offer this. If they don't or wont due to the fact that its a duplex, its because they as a lender have an overlay that Fannie Mae / Freddie Mac doesn't have? There are also lenders that will give you a HELOC up to 80-90% on this. Do some searching, you will find the best lender.
As far as Short Term Rental income, most lenders can not count the income until it shows up on your tax return. Do you have 2021 tax return with this income showing up on it. If so, it should be counted. If not, the appraiser will show what the market rents are (long term) and you should get credit for that rental amount.
I hope this helps.
Awesome I appreciate the knowledge and insight!
Quote from @Zachery Highfield:
Quote from @Erik Estrada:
Are you planning on using that equity to buy another primary and keep that one as a long-term rental?
Yes that is the plan!
You could maybe get away with a hard money loan and having the 2nd position on your primary. Usually they only lend about 65%-70% LTV for a purchase. Be careful though because there's a balloon at the end of the loan. You would have to either refinance or sell both properties.
@Zachery Highfield Did you ever get this worked out? There is a lender I know of that can easily take care of that but you may only get 70% LTV since its MF property.
Quote from @Zachery Highfield:
Hey I hope everyone is good! I am very curious to see if anyone out there can help me access some equity in my duplex. This is my first time doing it and these are the issues I have ran into so far, if anyone has any advice or services to offer I would love the help!
1. Won't lend on the whole duplex because my primary residence is only for half of the property.
2. They do not like my AIRBNB income
3. Then a couple of the banks would not touch it because it is a multi - family property, and the only work with single family.
Honestly, nothing in your scenario sounds out of bounds to me. You can obtain conventional and even FHA financing on a duplex and if you're using one unit as a primary the loan is treated as a primary home loan. The STR income could be a hindrance in terms of DTI because until you've had 12 months of STR income showing on your taxes there is no way to average it through standard underwriting analysis.
That said you could easily obtain a Non QM primary home loan to cash out refi as well. If you're still needing help I'd be happy to share my expertise.
Best regards,