Texas Trouble Refinancing Househack

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Texas Trouble Refinancing Househack

Keaton M.
Austin, TX · Member since 2017 · 75 posts · 39 votes

My wife and I live in a fourplex in Austin that we renovated. We are looking to pull money back out and leverage it for more properties, but Texas law keeps you from refinancing your personal property if collecting income (as described from a few brokers). I wanted to see if anyone has work arounds, aside from moving out, or other ideas. Thanks!

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Daniel Lioz
Houston, TX · Member since 2019 · 99 posts · 26 votes
5y

Can you split the 4 plex 3 into LLC and keep 1 yours in your name? Refi the 3 in LLC. Also, reach out to some local credit unions, not through a broker, they are more flexible since they keep loans internal. I know in Texas you can do cash-out refi of up-to 80% LTV, with local bank/credit union they should be pretty good with fast appreciation in the market to get accurate LTV.

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  • Robert TinkerPro Member
    Rental Property Investor · Round Rock, TX · Member since 2019 · 251 posts · 159 votes
    5y

    Will they do a HELOC?

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  • Keaton M.
    OP
    Austin, TX · Member since 2017 · 75 posts · 39 votes
    5y

    @Robert Tinker they considered that to be the same/similar as refi and won't allow that either. 

    @Ryan Kelly have you or any of your clients gone through a similar situation?

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  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    5y

    @Keaton M. I have not had clients specifically try to refinance while living in a multi-family property. You may want to talk with some commercial lenders and see what options you could have if the property was shifted to an LLC. You would lose your primary residence tax benefits but could give you some financing flexibility.

    [email protected]512-674-5478
    Ryan Kelly Group - Keller Williams5112 Reviews
    WebsiteView Page
    1Reply
  • Keaton M.
    OP
    Austin, TX · Member since 2017 · 75 posts · 39 votes
    5y

    @Ryan Kelly it sounds like that may be my only option unfortunately. 

    0Reply
  • Daniel Lioz
    Houston, TX · Member since 2019 · 99 posts · 26 votes
    5y

    Can you split the 4 plex 3 into LLC and keep 1 yours in your name? Refi the 3 in LLC. Also, reach out to some local credit unions, not through a broker, they are more flexible since they keep loans internal. I know in Texas you can do cash-out refi of up-to 80% LTV, with local bank/credit union they should be pretty good with fast appreciation in the market to get accurate LTV.

    2Reply
  • Keaton M.
    OP
    Austin, TX · Member since 2017 · 75 posts · 39 votes
    5y

    For anyone interested, I was able to cash out refi using a private mortgage fund through a local broker who I believe is active on BP forums. I'm not sure if I'm allowed to reference them or not. 

    1Reply
  • Casey Caton
    Investor · Member since 2017 · 69 posts · 65 votes
    5y

    @Keaton M. That's good to hear! Are you going to keep putting the money to work in the Austin market or are you going to spread it out in other markets? 

    0Reply
  • Keaton M.
    OP
    Austin, TX · Member since 2017 · 75 posts · 39 votes
    5y

    I'm paying my investor (my dad) back 100% plus interest with a bit left over to put towards a new primary in Austin or possibly Round Rock close by. 

    2Reply
  • Keaton M.
    OP
    Austin, TX · Member since 2017 · 75 posts · 39 votes
    5y

    @Casey Caton

    0Reply
  • Cody McClendon
    Member since 2021 · 7 posts · 0 votes
    5y

    Keaton, how familiar are you with hard money lenders? Congrats on the investment, btw!

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