Help with Converting a Multifamily Apartment Deal

[Ricardo R.]

Hi everyone, I have my sights set on an 6 unit multifamily apartment building and am wondering it it makes sense to split it into two 3 unit apartment buildings. I would really like to hear everyone's opinion on this and even more so from those that have experience in this as well. Aside from figuring out if it can actually be done or not (lets just assume it meets all the requirements for the township and it can be done) -- I am more wanting to focus on the financial aspect of it. So here goes...

6 unit building being sold for $600K --- thus I'll have a $450K loan (25% down).

Triplexes (3 unit buildings) in the same area go for $400K as per comps

Considering that the 6 unit is valuated as a commercial property in that the NOI and cap rate play a big role in the price; Would it be wise to split the 6 unit building into two Triplexes where as the valuation is no longer dependent on the NOI and Cap Rate but instead on the comps?

My goal would be to cash-out refinance. How exactly would that play out and how would I go about doing that? For instance:

Buy 6 unit building at $600K on a $450K loan --- then re-zone, split and convert to TWO - Triplexes. Am I right in assuming that the value is now based on comps and that each Triplex would now theoretically be worth $400K each or essentially $800K total for both? 

If so, how do I go about now cash-out refinancing my commercial loan of $450K? Is it as simple as them being able to now base their numbers off of $800K and allowing me to pull out 75-80% --- so say $600K minus the original $450K loan, allowing me to be able to pocket $150K? Would I now try to cash-out refinance each separately (1 triplex per closing) or as a whole (2 triplexes)?

Your thoughts?

Alex