Hey All - 

Been listening to BP podcast for about 12 months now.  I love the great ideas, guests, discussions, and insights offered.  

My wife and I recently purchased our fourth income property, and used seller financing to acquire it - our first CREATIVE FINANCING DEAL!!  The numbers on the house are great (purchased for $79k, appraised at $102k, and rents for $1,350).  We have a two year term on the land contract, and have already begun seeking ways to refinance the property, just as soon as the 1-year seasoning period is up.  

The problem we are running in to is our DTI ratio. We both have full-time jobs, exceptional credit, and long employment history. However, the existing four mortgages we have (three rentals and a primary) make our DTI too high to obtain a conventional refinance on the house. So, we started looking in to commercial lenders.

We were hoping to access some of the equity in our existing homes to help us with the refinance process on the seller-financed property, or even to cash out the balance entirely.  One thing we'd really like to do (not sure if this is possible) is to roll all of our properties in to one large commercial loan, and cash out all of the equity at once.  However, we haven't been able to find anyone to do that for us.  

Another roadblock we're hitting is the problem of equity.  Because we've been diligent in seeking out and purchasing only exceptional deals, we have about $130k in equity in our three rental properties (based either on appraisal or market analysis).  We owe a total of $250k on three properties.  This does not include the equity in the most recent seller-financed deal.  All of this seems like great news, and it is, I suppose....  HOWEVER...

The thing I'm hearing from commercial lenders is frustrating.  They're telling me that the appraised values of the homes mean nothing to commercial lenders.  They only care (and will loan on) the actual purchase price that we got the homes for, even though each of these homes has an appraisal that is less than a year old, and indicates that the properties are worth far more than we paid for them (due to market improvements and a lot of sweat equity)!  

So, I'm wondering who can point me in the right direction on how to access and leverage some of the equity that we have worked hard to build up in our properties so that we can continue to grow our business, and - in the near term - be able to refinance the seller-financed deal on time.

Thanks in advance for the guidance!

Dave