BRRR Help - Refinancing Multifamily troubles

[Michael Breedlove]

So, my wife and I purchased our first investment property in May of 2017 (a 4plex) in Jefferson, La (outsIde of New Orleans). We comepletely renovated one unit and moved into that one unit. We've increased rents on 2 of the other 3 units and soon to be all 3 of the other units. We just recently found out that we are pregnant with TWINS. This has changed our strategy moving forward for investing. We now are in need of a bigger house for us to purchase so we can fit our 4 kids and 2 dogs. My plan was to refinance our 4plex so that we could use some of the equity to put towards our next house. I was also hoping to do some updates to our next house to build some equity with that property as well. But, I'm having trouble refinancing the 4plex. I'm still new to investing, but I've been told that on a multifamily property you are only able to borrow up to 70% of the total value. Because we purchased the 4plex as a Owner Occupancy...we only put down 5%.  When we purchased the 4plex it appraised at $383k and that was our purchase price. We financed around $363k. However, we completely renovated one unit, made exterior updates and small updates to other units (paint & a/c work), increased rents, and the neighborhood has undergone some big positive changes. A new huge hospital was built just blocks away, new developments with commercial buildings and gas stations around the corner, other multifamily properties have sold 500K+), duplexes have sold 300K+, and also just a few streets over there have been some higher end condos built and sold. I have not had an official reappraisal done on the property, but I think the property will appraise for AT LEAST 450k, but I think higher. I‘m not really sure what my options are bc I definitely do not want to sell the 4plex but need to access the equIty. Any advIce Is apprecIated.

[Alexander Wardell]

@Michael Breedlove first of all congrats on the twins! So as you know already 70% of the conservative appraisal of 450k is only 315k ( about 45 k less than you owe taking into account that you have paid the mortgage for the past year). You would need it to appraise for at least 500k before you would even gain any capital from the refi. So that is off the table. 

Is there any way you would be able to get another loan for a bigger primary residence? Then rent out 100% of the 4plex and use that additional cash flow to offset the new property.  It would be a shame to sell the 4 plex just to buy another house (probably a single family from what I understand). 

If you do sell the 4 plex could you possibly look at getting two separate  properties, one primary and another rental (duplex or single family)? I am just throwing out ideas here that leave you with at least one investment. 

hopefully someone can give some sound advice and you can figure this out before the twins arrive! 

Good luck.