Pulling equity out - is it possible?

Question

We currently own 5 properties, all have equity with less than 80:20 loan to value. One inpaticular has 30% loan to value currently. We live minimally off the income they generate currently on a sailboat. would ideally like to pull some equity put in order to fund additional investments. All 5 properties generate an income above all expenses including mortgage equity payment. That said our income overall is around 30k and no bank will loan us money. Is there a creative way to pull out the equity? We can grab a job for a bit to continue outback investing / if need be... but wanted to ensure im not missing something.

Or point me to a good article /blog!!

Thanks in advance for your time and knowledge.

Or point me to a good article /blog!!

Thanks in advance for your time and knowledge.

Alex Bekeza · Answer

@Heather Mapledoram

I've sent you a private message.

The demand for commercial loan products, even on 1-4 unit properties has never bee higher.  Rising conventional rates are narrowing the gap between them and commercial.  They are ideal for self employed investors or any experienced borrower who does not meet the DTI requirements for conventional financing.  This is a common problem for many investors who have significant write offs making their income appear lower.

Many people aren't aware that there are also 30 year, fully amortized commercial products out there.

Doug McVinua · Answer

@Heather Mapledoram For a lender to truly evaluate your scenario they are going to want tax returns for the last couple of years. The Lender will review the income and all the schedules for deductions etc to then determine your true debt ratios etc.

I'm in AZ and could provide help recommending a lender if you desire to really evaluate this situation.

Teri Feeney Styers · Answer

@Heather Mapledoram traditional banks are going to want both collateral and an ability to repay. Sounds like you only have one of the two. You need to put together a very complete and clean package to present - along with some sample properties you would acquire should you get the loan. Show them how the money will work. If you can't fit into their "box" then perhaps look at a private lender and use your properties as secondary collateral (ie: your skin for the game).

Heather M. · Answer

What lender would all This?  All I’ve spoken to we’d have to have a 40% debt to income ratio and keep it under 50 after next purchase

Heather M. · Answer

the properties are are Colorado, Arizona, and Oregon.  Montana is technically our state of residence.

Tim Johnson · Answer

what state are in?  You can do a cash out on the one for sure with 30% LTV but the other ones are to thin.