Looking for Creative: Financing Lubbock Duplex ($90k–$110k)

Lubbock, Texas
Buying & Selling Real Estate
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Looking for Creative: Financing Lubbock Duplex ($90k–$110k)

Cody H. Blomberg
Investor · TX · Member since 2020 · 5 posts · 5 votes

Hey everyone,

I’m currently based in DFW, working in the tech industry with a stable six-figure income. I'm looking to acquire my next investment property in Lubbock, TX and am exploring creative financing options to structure the deal.

What I'm Looking For:

  • Target Property: Duplex in the Lubbock area.
  • Target Purchase Price: $90,000 – $110,000 range.

Current Position & Strategy:

  • Current Lubbock Portfolio: I currently own a duplex with a conservative $40k in usable equity. 
  • Preferred Structure: Ideally, I’d like to work with a local lender or private money investor willing to cross-collateralize—placing a 2nd lien on my existing duplex to fund the purchase/down payment of the new Lubbock property.
  • Alternative Options: Open to seller financing or other creative deal structures.
  • Financials: Strong W-2 income to support debt service easily (not considering other investments income). I have capital in other investments that I prefer to leave untouched for now, so maximizing leverage using existing equity is the goal.

If you are a local Lubbock investor open to seller financing, a private/portfolio lender comfortable with cross-collateralization, or an agent with deals that fit this criteria, let's connect.

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  • Morgan Hondros
    Member since 2019 · 5 posts · 3 votes
    2mo

    Cody — cleanest way to get the down-payment leverage you're after: a DSCR cash-out refi on the Lubbock duplex you already own, then use those proceeds as the down payment on the new one. Qualifies off the property's rent, not your W-2, and it's simpler than a 2nd-lien cross-collateral — one clean loan, cash in hand to deploy. I broker these and can run the numbers on what it'd pull. DM me and I'll tell you straight what fits.

    1Reply
    • Cody H. Blomberg
      OP
      Investor · TX · Member since 2020 · 5 posts · 5 votes
      2mo
      Quote from @Morgan Hondros:

      Cody — cleanest way to get the down-payment leverage you're after: a DSCR cash-out refi on the Lubbock duplex you already own, then use those proceeds as the down payment on the new one. Qualifies off the property's rent, not your W-2, and it's simpler than a 2nd-lien cross-collateral — one clean loan, cash in hand to deploy. I broker these and can run the numbers on what it'd pull. DM me and I'll tell you straight what fits.


      Hey Morgan — appreciate the reply. I like the concept, but the LTV cap is where it falls apart for me. More context: Property's worth somewhere around $100-115k and my current loan balance is $59k, so at 70% I'm netting maybe $10-15k after closing costs, and less if the appraisal comes in like too soft. The quotes I've gotten back so far haven't been great either to be honest on a non DSCR cash out but I think they work similarly besides the qualification. Any way we can work around this in your experience?

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  • Bryan MaddexBusiness Member
    Lender · Charlotte, NC · Member since 2015 · 160 posts · 76 votes
    2mo

    Hey @Cody H. Blomberg

    For Texas, "usable equity" by definition is look at tapping 80% of the value of your home minus the 1st mortgage. 

    If your existing property is worth $100k, you would have $21k of lendable equity. 
    If your existing property is worth $115k, you would have $33k of lendable equity. 

    If you do a heloc that only has 2% of the limit as a fee, you should have plenty to use as down payment on your new purchase. 

    I know of at least 22 lenders that will do a heloc on investment property.

    There are cross collateral DSCR loans that can tap your existing home along with the new home. The small home values will make these programs ineligible tho. Not a ton of lenders will do DSCR loans under $100k and most will cap you at 70 or 75% loan to value on a cross collateral product.

    Pure cash out refi on your existing home likely isn't worth the closing costs. If it were me, i would shoot for a heloc.  

    Post any questions that you have!

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