Can I do this? Note/refi advice.

[Noam Adler]

Hi

I have a four plex in Ohio its net profit is around 17k a year. I'm currently trying to refi/cash out . The problem I'm having is since it's a four plex it gets appraised as a residential property.  Therefore the appraisal is all based on comps and not cap rate etc and the other house in this area all being sold for less (my property had extensive rehab done to all four units). 

What can I do to get as much cash out for this property?  Anyway to make a note  and sell that? All advice is welcome. 

Thanks

[Stephanie P.]

Originally posted by @Noam Adler:

Hi

I have a four plex in Ohio its net profit is around 17k a year. I'm currently trying to refi/cash out . The problem I'm having is since it's a four plex it gets appraised as a residential property.  Therefore the appraisal is all based on comps and not cap rate etc and the other house in this area all being sold for less (my property had extensive rehab done to all four units). 

What can I do to get as much cash out for this property?  Anyway to make a note  and sell that? All advice is welcome. 

Thanks

If the property is going to be considered an overimprovement  for the area, you will end up having more money into the project than the 4 unit is worth.  Fortunately, you're in good shape with the yearly net profit.

You won't get a lender to take the  income approach for a 4 unit and challenging the appraisal will only lead to frustration.  You might get them to budge a little, but it's doubtful.  I'm usually a more optimistic person, but when dealing with this subject, the outcome is usually not one that's full of sunshine and lollipops.