All-

This is a long one; thank you in advance for reading :) Not an investor (came here because I realize and value the experience of professionals).  Our current home is under contract; hoping to net out $300k cash after all is said and done.  My wife and a relative of hers have a partnership in a rental home (owned free and clear); once the current tenants are out, we're going to do a major gut and renovation.  With a builder we know and trust, we're guesstimating $750k of work.  The house is currently on the tax rolls for $425k ($350k land, $75k improvement).  It's understood that the property is "ours" with the intention of us moving in, regardless of titling.  it will be our primary (and only) residence and we'll rent while work is being done.

Goals are: 1) be able to leverage homestead exemption (need to clarify with the taxing authority if it needs to be in our names); 2) finance as much as possible (taking advantage of current rates)- putting just enough down to avoid PMI and ensure that we still get the "best" rates (assuming 20%); 3) making sure we have as many financing options as possible (going back to titling- if it's the name of a partnership and not individuals, does that limit us). I also understand that most/all of these options are going to be governed by a potentially higher rate as it will be a jumbo.

I "think" we want to title in our own names given #1 and #3.- would love your feedback on if that's not the case.  Moving on to #2, which has a lot to do with re-titling.  I'm also going run with the hypothesis that construction and renovation loans are a lot harder to come by recently and leave those options out.

We're both 800+ and gross monthly is $13k.  No debt, just 2 car payments.

Option A- go for a 30-year fixed and buy the house from the partnership.  Might have to be just in my name to make it an arm's length transaction (as my wife is one of the partners).  Sale price would have to be an appraisable value- let's call it $425k.  That cash just comes right back to us (whatever the partnership split is, think we just adjust that ahead of time?); so we financed $340k (80% of $425k), and $410k gets paid in cash (the 20%/$85k down plus the remainder).  Potentially, there's a cash-out refi after construction is done, using the after-reno value (with risk of what interest rates might do between now and then).

Option B- Quitclaim the deed to us. Cash-out refi (which, IMVHO, is the most easily available, and has the rates closest to a traditional mortgage). I "think" we can do this before 6 months, without hunting down an agreeable lender, because it isn't a financed purchase. Same as before, we're under some LTV cap, so we're financing some amount less than $425k (probably similar to above). Unless it's normal practice for at least some lenders to look at ARV. If not, then same as above, wait until after renovation for another cash-out refi to borrow that cash back (at hopefully a still decent rate).

Would love for anyone to tear this apart and tell me where I'm thinking about it incorrectly, and if there are other options here I'm just missing in my beginner brain.  If someone knows of a lender who is still doing single-close/convertible construction-to-perm mortgage or thinks they're around, would love to know as well.

Bottom line is, trying to figure out what my best bet(s) would be before I start contacting banks and online lenders.

Thank you for reading!