(I told him we have other options, but I would rather that he gets to make the profit instead of the bank.)

You will then have a few options with that rent money....you can put it into principal or you can start saving it to purchase yet another property.

Seeing a lot of success when people have an unemotional optionality for the project and simply run the numbers when the project is complete - put it on the market for sale and for rent and then plug it into a pretty basic spreadsheet!

If you are looking for a generic 80-90% of purchase to fund with a good FICO score for a normal 1-4 unit, you don't need to spend too much time on finding lenders as you have plenty of options.

I know of some options where you can go to non-traditional lenders and use a DSCR (debt service coverage ratio) loans and you may be able to leverage that money and not have to rely on your credit to get approved.      

Going to be very different cash-out refi options depending on the type of building/tenants

The rent is less but compared to the expenditure it’s a much better option in my situation.

LTRs offer steady income with less day-to-day management, potentially appealing in a market with limited options, yet may yield lower returns and pose risks of wear and tear.

I would weigh those two options out and see what costs less overall between an entire new loan and or the blended rate of the two.

If you want to discuss the options you're considering in more details, please feel free to message me!