All Forum Posts by: Michael Breedlove

So, my wife and I purchased our first investment property in May of 2017 (a 4plex) in Jefferson, La (outsIde of New Orleans). We comepletely renovated one unit and moved into that one unit. We've increased rents on 2 of the other 3 units and soon to be all 3 of the other units. We just recently found out that we are pregnant with TWINS. This has changed our strategy moving forward for investing. We now are in need of a bigger house for us to purchase so we can fit our 4 kids and 2 dogs. My plan was to refinance our 4plex so that we could use some of the equity to put towards our next house. I was also hoping to do some updates to our next house to build some equity with that property as well. But, I'm having trouble refinancing the 4plex. I'm still new to investing, but I've been told that on a multifamily property you are only able to borrow up to 70% of the total value. Because we purchased the 4plex as a Owner Occupancy...we only put down 5%.  When we purchased the 4plex it appraised at $383k and that was our purchase price. We financed around $363k. However, we completely renovated one unit, made exterior updates and small updates to other units (paint & a/c work), increased rents, and the neighborhood has undergone some big positive changes. A new huge hospital was built just blocks away, new developments with commercial buildings and gas stations around the corner, other multifamily properties have sold 500K+), duplexes have sold 300K+, and also just a few streets over there have been some higher end condos built and sold. I have not had an official reappraisal done on the property, but I think the property will appraise for AT LEAST 450k, but I think higher. I‘m not really sure what my options are bc I definitely do not want to sell the 4plex but need to access the equIty. Any advIce Is apprecIated.

@Bob Okenwa thanks for the advice. Appreciate you taking time to post.

Hey BP!

     So, my wife and I purchased our first investment property in May of 2017 (a 4plex). We comepletely renovated one unit and moved into that one unit. We've increased rents on 2 of the other 3 units and soon to be all 3 of the other units. We just recently found out that we are pregnant with TWINS. This has changed our strategy moving forward for investing. We now are in need of a bigger house for us to purchase so we can fit our 4 kids and 2 dogs. My plan was to refinance our 4plex so that we could use some of the equity to put towards our next house. I was also hoping to do some updates to our next house to build some equity with that property. But, I'm having trouble refinancing the 4plex. I'm still new to investing, but I've been told that on a multifamily property you are only able to borrow up to 70% of the total value. Because we purchased the 4plex as a Owner Occupancy...we only put down 5%. 

When we purchased the 4plex it appraised at $383k and that was our purchase price. We financed around $363k. However, we completely renovated one unit, made exterior updates and small updates to other units (paint & a/c work), increased rents, and the neighborhood has undergone some big positive changes. A new huge hospital was built just blocks away, new developments with commercial buildings and gas stations around the corner, other multifamily properties have sold 500K+), duplexes have sold 300K+, and also just a few streets over there have been some higher end condos built and sold. I have no had an official reappraisal done on the property, but I think the property will appraise for AT LEAST 450k, but I think higher. 

Any advice is greatly appreciated.

@Gino Barbaro thanks for the encouragement and advice. The 4plex situation is definitely something I am definitely wanting to continue pursuing. And along the way, I’ll continue to educate myself and surround myself with the right people. Thanks for taking time to comment!

@Jeff Kehl great information and very informative man. Thanks for taking the time to comment. And thanks for breaking down the commercial loan example as well.

@Braden Smith thanks for taking time to post man! Appreciate the encouragement and I may need to buy you coffee in the future and pick your brain some!

@Adam Widder great advice too man. Sometimes I know we can hold ourselves back by simply not making decisions and moving forward. Meeting with a commercial lender is a great place to start to just find out what the options are. Thanks for the input. 

@Caleb Heimsoth thanks for the information man. Definitely sounds familiar from some podcast episodes. I’ll definitely be looking more into all of that. Appreciate you taking the time to comment. 

@John Fortes great advice! I’m certainly not closed off to finding the right deal...period. But the concept of setting a standard of what your willing to do is a GREAT piece of wisdom. Thanks for your input! 

@Bjorn Ahlblad thanks for the encouragement! Any advice in regards to commercial financing? Is it more difficult to be approved for commercial financing? Is owner financing common with commercial real estate?