4-Family - Rehab Advice
Looking for some input from more experienced investors on financing strategy for a current deal.
I recently purchased a 4-family property for $125,000 in an up and coming rental area. I put 25% down, so I have an existing loan balance of roughly $94,000.
The property is vacant and needs a full systems rehab, but has great interiors (intact plaster, beautiful trim, 11 foot ceilings, hardwood floors, great windows, doors). My estimated rehab budget is $200,000 to update infrastructure of the brick building and turn each 750 sf unit into a 2 bedroom 1 bath.
Once stabilized, I believe the property could be worth somewhere in the $375k-$425k range, depending on final rents and level of finish. Estimated rents after rehab are roughly $1,200-$1,400 per unit. (and the rental I just cash out refinanced appraised at $131 a sq ft in the same neighborhood 8/2025). However, due to lack of comps in the neighborhood, and historic disinvestment, the ARV appraisal came back at $210,000...
Here's where I'm running into challenges:
Local banks are hesitant to lend additional rehab funds because the property is currently vacant and already has a first mortgage.
I don't want to bring in partners if possible.
I'm trying to decide between:
- 1: renovating one unit at a time with equity and credit.
- 2: seeking a different loan, and or appraisal.
What do I do?
For context, I have prior rehab experience on 2 single family rentals and live/work very close to the property, so 1 can oversee construction regularly. I'm an architect by trade and have a GC pricing different alternatives.