Convert 8 unit building so they can be sold/financed individually

[Brent Rieman]

Looking to see if anyone has any experience or suggestions on this topic.   I have an 8 unit townhouse building,  its beachfront on Lake Erie, very unique property.  Its considered commercial for Banking purposes so I'm limited to commercial lending.   Currently I'm on my second 5/25 commercial loan.  A few constraints with this apart from only being able to lock the rate 5 yrs at a time is I'm finding it essentially impossible to pull any significant cash out through a refi.  If they let me pull cash out its only for property improvement.  Rents currently range from 1000-2000$ a month even though each unit is an identical layout.  The higher rents are for the ones I have renovated and turned, the others are good tenants I inherited but wouldn't be able to pay the higher rate.  I have been bootstrapping the renovations as units come open, which has worked well as I don't have a big reserve fund and I want to keep what I have for a rainy day, (like a sewer pipe reconditioning project that just cost me 12k)

With that being said there are other properties in the county that are similar to mine but are a condo complex and units are available to purchase individually on a regular 30yr fixed loan. Ive done a bit of homework on what it might take to convert this. The county didn't see an issue converting it when I talked to them. I would need to start with a survey to split everything up, (aprox10-15k) and then have a lawyer draw up everything so it can be a condo complex. (no idea on cost) Of course I would need to start and contribute to a HOA for exterior maintenance. I'm not sure how my current lender would feel about this I'm guessing they would likely be ok with the setup part if I did all this while they still held title to the whole property. But im not sure of the logistics of then refinancing probably 4-5 units depending on LTV's at a time to come up with enough to pay the commercial loan off. Then refi a few more for straight cash. I don't plan on selling any but even if I sold 1-2 I would still control the HOA. This also gives me a easier exit strategy if I ever wanted to sell the property or downsize.

Right now the building is worth around 900k to the bank when I re-upped the loan which is at 590k.  I can force the value of the building up by getting the rest of the rents to 2k but even then only let me use a cash out for property improvements.    If each unit was available separately they would be work 150-200k each, maybe more.  So im looking at 1.2-1.6+mil.  Even if I did 8 - 30yr fixed loans at 70% ltv id cash out around 250k on the very conservatives low end and likely closer to $500+k

1- I'm looking for advise or recommendations for attorneys to talk to about this process. 

2- I'm looking for thoughts from the peanut gallery on if I should or shouldn't proceed and if their is anything I'm not considering.