Purchase price: $155,000 Cash invested: $175,000 Sale price: $615,000 A friend and I purchased the property from another party that won it at auction and could not get financing.

However, there was no utilities to the third floor. 

Time for a divorce and to marry up to someone who knows what they are doing.However, the Fannie and Freddie guideline for a 4-unit cash out refi is 70% LTV max, so that part is correct.No need for commercial if you're good with a $490K loan amount if it appraises for $700K.And don't pay points unless you aren't going to sell or refinance again for at least 6-7 years or more.And find a new loan officer, for the love of all things holy. 

To meet IRC Sec 453(l)(2)(B)(ii)(II) you or a related party of yours shouldn't make improvements before the sale.

I may create another LLC to put the third house under. 

Income is income is income...always...and regardless of anyone's political party, the Govt. wants their cut.   

The third step was to write down my goals.

They will also charge you to have an inspection by a 3rd party to make sure the work is done.

@Britt Lang Welcome to Fort Wayne .There are two REIA meetups in Fort Wayne one every third Saturday of the month at 10am in Pro-tech building.

two partners that each got a third of the profit.