Residential vs Apt Building & Financing

[Deron Barnes]

Hello BP, 

I am currently considering whether to continue investing in residential multi-family or invest in a multi unit apartment (5-10 units). Ideally, I would like to invest in a 5-10 units apartment. I currently owned a 3 family outright with no mortgage under a LLC but I have learned that banks do not like giving a line of credit to businesses that own residential property. I need help deciding whether I should pursue a second residential multi-family via FHA loan which I am already approved for or go after an apartment building. To pursue an apartment building, I estimated I would need about $125K in down payment and misc expenses, which would put me in the $500-600K price range. I currently have $25K cash but I would need to take about $100K in equity out of my current property. Which would be difficult given banks do not like giving loans to businesses with with residential properties. What do you guys suggest?

Any and all help/input would be greatly appreciated.