How to finance my next deal?

[Michael Seeker]

I'm wondering what might be my best approach for accessing equity and using it to finance another property.

Setup:
I purchased a SFR as my primary residence and still own the property/pay the mortgage every month.

In December 2010, I partnered up with a coworker and we purchased a 4-plex that was in need of some work. We've each contributed half of all expenses to date. My partner secured the loan as an owner-occupied property and we quit-claimed the deed to both of our names shortly thereafter.

Fastforward to today, we've put loads of sweat equity into the property and have 2 units rented, one occupied by my partner, and the 4th unit will be completed and ready to rent within the next month or so.

At this point, we would like to refinance in order to purchase another property. We're also considering setting up an LLC to hold ownership of the 4-plex and any future properties.

Questions:
-What is the best approach to cashout as much equity from the 4-plex while simultaneously transferring ownership to a newly created LLC, or should we be considering something else?
-Would it make more sense to refi the 4-plex as owner occupied or refi as an investment property given that my partner will likely not live there for more than 6 more months?

Any thoughts, comments or insights would be greatly appreciated!