Need help! The bank wants me to sell my property.
First off, This is my first post outside the confines of the local forums, so hello to all you wonderful people!
A little background, I am a seasonal Wildland firefighter for the U.S. Forest Service, this means I'm gone a lot in the summers. While I was home for a bit this summer my realtor showed me an off-market deal on a 3 plex and I was able to get an offer accepted. The bank approved financing and we were a go! Timing wasn't great but it was a good deal so who cares!
Off to Oregon I went for 20 days with spotty cell service with much anticipation of closing on the new property when I returned. I own another house, it was a live in flip, I bought it when I was 20 years old and my father co-signed because of my lack of credit. The flip process was done but I was planning on keeping it and turning it into a rental. That is when the bank contacted me and said that my debt to income ratios would not work if I wanted to keep both properties. They said the house would have to be listed for sale before the closing date in order for them to lend on the 3 plex. This was bad news however I wasn't too worried. I had lived there for 2 years 6 months so the tax situation was covered and with the value add of the flip I could take the cash and reinvest it in new properties. The numbers would still have been way better to hold it as a rental (nearly 2% rule with my before rehab purchase price), but I didn't have time or the ability to try to look into other financing while I was in Oregon.
Fast forward to 1 week from closing and the bank says that they will have to take my name off the title for the house and leave it in just my father's name. I was away for work and did not have time to get into the details with the bank at the time. I didn't want to lose the 3 plex so we went along with what they said, but it didn't sit right that they were going to remove my name from the title (to meet debt to income requirements) and then also mandate that the property is listed on the MLS (even though my name wasn't on the title).
The 3 plex was purchased and the City rental Inspection is this week. My father was very generous by putting up with the bank during this process, however he is not interested in having a rental property in his name. I am working on a way that I can keep the house and use it as a rental. Right now it is sitting on the market going into winter in Iowa (2 inches of snow today), we all know how many people want to move into a new house in the snow. I have meetings with several banks this week to discuss refinancing, However I worry that I will run into the same debt to income issues. I am also looking into doing a quit-claim deed, however I know that my dad would be uneasy with that idea. I have built relationships with a few investors who would be interested in partnering but it is not a large property and may not be worth the time to manage if the cash flow was split.
Are there any other ways that I could turn this property into a rental instead of having it leech my savings for the next 4 months til the market picks up? Please help!
Nick Wallraff