REFI Problem - need advice !!

[Ivan Shao]

Happy New Year to BP Nation!!

My aunt has a 2 families house that worth 1 million;  1st fl (detached w/ 1 car garage) had been converted to 3 small 1 bd room units ( illegal conversation :(  ) .  She would like to pull out some equity to get into flip house.   To my understanding,  in order to get refinancing to pull equity out of the property;  mortgage company need to appraise the property. There are issues

1.  illegal conversation may cause the appraise value; or even not be able to pass appraise phase.

2.  She has a $90k W2 job but low credit ( below 700 )

I would like to help my aunt and partner with her to final income property or flip a house.  Could BP community throw some advice to us for this situation

Thank you !!