Multi-Family BRRR Strategy

[Nick Kourey]

We're looking at purchasing our first multi-family, and want to stay under 5 units on this one just to get our feet wet in the arena before jumping into commercial lending. I've identified a potential property that is 2 brick ranches broken into 4 2bd/1br units. All 4 units have been rented out for 3+ years. Rents are $525, $550, $550, $600. Similar units in the area (of which there are only a handful of vacancies) are running $850/month. Asking price is $240K, and they're looking for a cash sale. We shouldn't have any issue getting a hard money loan with 20% down. My question is though, if I want to renovate in order to refinance (since simply increasing rent and decreasing expenses won't effect the value of the property) what is the best strategy? I really want to recoup my cash as quickly as possible but it would seem the only way to do that is substantial renovations inside. The outside if in pretty good shape. So my question is, do I:

A. Wait until the first unit is up for renewal (at least several months out) and raise the rent substantially (I'm thinking $750) hoping the tenant will not renew, then renovate, repeat again when the next lease is up, then refinance?

B. Offer to put 2  tenants up at a nearby hotel for a few weeks while doing a quick reno in their units and then refinance.

C. Something I haven't thought of...

Feedback and insight would be appreciated, thanks.