Can we pull money out in Quadplex/pentaplex refinance?

[Evan Kline]

Hey all,

Quick deal analysis question. Looking at a quadplex for 125,900 (sellers lowest price- started at 160k, tax value has bounced between  145k and 160k over the past 5 years). There is a 5th unit that can be remodeled (and the building is grandfathered in to allow 5 units), but it's basically an unfinished moldy basement right now. Currently all units together rent for $1650- it's being run by a property management company, full of renters who are paying on time. Some updates could raise rents- adding a communal laundry, adding separate heating units (currently all on the same heat with no individual unit control), etc. Basically everything about the house needs updates, but it's solid and functional and pretty easily rented.

My partner and I have a private money lender ready to go. The main question we have is how feasible is it to pull our money back out in a refinance? Especially if we add the 5th unit, which would certainly up the value significantly, but won't that change the type of loan?

I've been working on multiple deals, but nothing has panned out yet, this would be our first if we move on it.

Thoughts? anything else we need to consider?