Multifamily Refi??

[Eric Mcginn]

So I'm officially a homeowner as of last thursday. 

I'll start with the down and dirty facts:

Property has two duplexes (4 units) but one building is uninhabitable and will be demolished next week.

I purchased using LLC partly for liability and also because lender required it.

because of condemned building, banks and mortgage companies wouldn't touch it so I found a private lender and got some pretty expensive money for 90 days. 

sale price $70k, wrapped in $7.5k of demo for total loan of $77.5k, paid cash for closing and asbestos abatement ($4k and $3k)

previous appraisals came in $106k for land, $40k for building, appraisal for closing came in significantly less at $93k assuming the building has been demolished. 

I'm confident the value will go up as its an up and coming neighborhood and excellent location across from the river in Biddeford Maine 04005.

the good building has nice paying tenants in each unit @$700 each, so it will cashflow

OK, I figured once the building was down it would be easy peasy to refinance, however that doesn't seem to be the case. 

having under the LLC is impeding residential loans, no seasoning on the appraisal is impeding others. I've still got a lot of phone calls to do and I'm sure I'll figure out the best deal but I'm hoping you all might have some input.

two different scenarios I'm looking at are:

1) Commercial finance @ about 6% @75% of recent appraised value of $93k = $70k and I would get $8k in private loan (also at about 6%)

2) since I'm only member of LLC, switch to my name personally for refi, then switch back after successfully refinancing. I know this pay be against some stipulations, but if I'm paying on time, will they care?

lastly, to throw a monkey wrench in the deal, I would love to take advantage of the grandfathered zoning the city has extended to me for 1 year to replace the two unit building. with current zoning I would not be able to add residential units but they will allow it for one year after demo. The only way I see this being worth it long term (and Ive put a lot of thought into this) is to lay a slab and get a used single wide and convert into two studio apartments for a total cost of <$15k. The city has no problems with this, but some residential loans have stipulations against it. 

Ive found myself in quite an unusual situation. thankful for any light shed onto it,

Eric