Quote from @Matt Devincenzo:
I think you need to back up to the beginning and share the short version of the property's story. Where is it, how much did you buy for, what are current rents, what are stabilized rents, what does it take to get to those rents, what rehab must be done, what are you trying to do...
A unit rehab is not an emergency. Needing to do it for cash flow isn't an emergency. Feeling pressure that it will solve your DTI/CF issue isn't an emergency. Those are all planning issues, and the above answers will help you formulate a plan. I think your situation may be better than you think, but you're focused on one issue and one supposed solution.
Haha, I feel like there is no short version when it comes to this property. First, though I do have 2 other income-producing single-family homes, I work full-time as a teacher, have 3 kids, and live in an insanely expensive city. After listening to lots of Bigger Pockets podcasts, I had a goal to level up and buy a 4-unit building, even though I knew I couldn't actually afford it AND that the property itself did not currently meet any of the metrics for being a good investment. But that same exact story is true of both of my other investment properties that are now netting me over $1k each per month.
The building is in Southeast Washington, DC, a neighborhood that has a bad reputation, but with the entire rest of the city exploding into a kind of gentrification I've seen nowhere else, it is inevitable that it will eventually swallow up that area as well, eventually....
Truthfully, I purchased high and knew the situation with the neighborhood: lots of voucher tenants, low rents peppered with luxury units popping up here and there, crime, the reputation, all of that. Only one tenant conveyed, the other units were vacant and I was able to market the units for what I consider high rents for the neighborhood. They are each rented for $1,550 a month and are mostly renovated.
We learned during inspection that the occupied unit would need significant repairs. My realtor was able to negotiate with the seller for funds put into escrow for some repairs once the tenant vacated. The tenant vacated with 6 hours' notice, and the non-profit paying their rent gave no notice and will not participate in any discussions about the condition in which they left the unit. The damage from tenants is so significant that all the walls must be demoed and replaced, doors, windows, flooring, kitchen and bath. So what we thought would be repairs initially, has turned into a gut job.
It feels like an emergency to me because I have a family to support and I can't have the property destroy my portfolio or my finances. I acknowledge that to most others this one would have been a hard pass, but for me, this is what I am doing and I believe in my ability to make this a very profitable venture for my family.
Can my other properties float this unit and leave it vacant? Absolutely. Is that going to make me any money or allow me to rehab the unit any time soon? Absolutely not.
I was heartened by your comment that these are planning issues, not emergencies. It does feel very urgent for us because we need the unit rented and paying its portion of the mortgage because if it is draining our coffers we don't have anything extra in case another unit goes vacant, a roof blows off etc. I posted my question here because I knew there were tons of seasoned folks in this community who could help me see past this bump in the road and create a map that gets us to the other side.
I currently have close to $1.3 million in mortgages on my personal credit. I have excellent credit and no other loans etc. But the mortgages are killing my personal DTI, even with 2 income-producing properties! I am not eligible for HELOC's for either property and every bank I've spoken with, even credit unions, say my DTI is too high to qualify. My partner and I applied together, with a very reasonable combined income, but still not enough for a bank to say cool let's do this.