2 units converted to condos in Nantucket

Here's an interesting deal.

A client of mine bought a side by side duplex last year on Nantucket Island where he lives and works. It was a great rental property. Now he has changed the property type to 2 condos and sold one of them for $510,000.

That's less than he owes in total against the house, but the appraisal on the other half, which includes a separate studio/ workshop (meaning, no heat) is $750,000.

Here's the deal. Refinance the half that he still owns keeping the mortgage high enough that he can pocket most of the proceeds from the sale, while paying off the first mortgage (5/1 Interest Only) and the Home Equity Line of Credit against the whole property.

It gets trickier...the borrower's credit score has dropped from 698 to 648 in the last few months.

As a Mortgage Broker who works with investors, this is exactly the kind of deal that turns me on and lights me up.

I'll blog the solution as soon as it's approved, don't want to jinx it.