BRRRR 4plex Income Based Appraisal loophole?

[Taylor Matthews]

Hey all,

A quick background - I purchased a 4 unit property in the Oakland, CA area that was distressed and severely under rent. I was able to renovate the four units and get the rents over 2x what they were before so that cash flow per month is around $2.4k free and clear total. Rents went from $3,400 to $7,450. I'm getting ready to refinance the property and I'm learning that income based appraisals are rare for properties like this. And if I don't get an income based appraisal the value will be significantly less - close to $400,000 less property value. 

On the county assessor's website, the property is ACTUALLY listed as a 5 unit property and the utility companies treat it as such (I.E. Waste management forced me to pay for the 5 unit property rates even though there are only 4 finished units.) I financed the original loan as a 4 unit however now I'd like to switch to take advantage of the 5 unit income based approach. Has anyone run into a situation like this before?

TL:DR First loan was 4 units however county assessor claims it is 5 units. Can I claim 5 units on the cash out refinance?

This may go nowhere however it's an interesting anecdote and something I am trying to solve. 

[Oleg Shalumov]

@Taylor Matthews 5 units would make it commercial property and it will evaluated based on income. 

I would think the property would value more as commercial, but I am not familiar with you local area and you would be the best person to compare value of 4-plex vs 5-plex. 

I would see if it is possible to add another unit and make it the 5-plex And how much it would cost.