Financing an improvement to a property

[Paul D.]

Hello,

I have a single family rental, the city will allow me to build a detached garage with an apartment above it and convert the property to a 2 family.  The property has a 250k mortgage (4% Apr). and is worth around 380k.  I expect the property to be worth around 500k after the additional building.  I have a contractor that will do the job for 100k.

What is the best way to fund this project?  I have 4 other investment properties, all with equity…. Bridge financing seems expensive.  Is there a lender that will finance the project with a long term mortgage?  Also, I would hate to refinance the entire mortgage and lose the great interest rate.

Any suggestions are appreciated!