Strategies for refinancing owner-occupied duplex

[Caitlin Worrell]

REI newbie here! We recently bought our first house, a run down duplex in a higher-end in-town neighborhood in Atlanta. We are house hacking. We eventually want to rent out both units, so our strategy is to improve our unit in a way that both improves our quality of life but also improves rental income potential.

The first 6 months were spent catching up on deferred maintenance on the interior/exterior. The house needed foundation work, which we were able to do with seller contributions. On the rental side we installed a new HVAC system, did a minor kitchen reno, made some bathroom updates, and cleaned ... so much cleaning! On our side, we took out the carpet and refinished the lovely hardwoods we found underneath, upgraded the stove, painting, and upgrading fixtures.

We purchased the house back in May at $515k. Since we weren't able to put 20% down, we are paying 4.875%. We are hoping refinance in the coming year, before interest rates increase. The house appraised for $555k back in December, but we need to appreciate by another $15k to quality for for refinancing (80%LTV).

The challenge we are finding is that there isn't a lot of multifamily inventory in our neighborhood. The comps tend are they are in rough shape and were sold longer ago (6-9 months). Is there anything we can do to improve our appraised value? We are recovering from depleted savings and saving for a wedding, so we are looking for lower cost, high ROI modifications. Any ideas would be appreciated! Thanks!