Hi steve,
Yes it's possible but obviously deal dependant. It works best when you add as much value as possible to the property allowing for a re-mortgage after works at a slightly higher level and thus releasing that equity to use again.
If it's an HMO conversion then you'll possibly (again deal dependant) be able to utilise a commercial mortgage which goes more on income than a traditional buy to let (which looks at both rental coverage and bricks and mortar comparables) and thus release that much needed equity.
With any equity release like this you need to ensure your original property more than covers your new mortgage payments, costs and a decent interest rate buffer. Commercial loans are very often fixed rate but repayment so bare in mind the reduced cash flow here but in return the interest rate risk is removed at least. I have many loans on 20 year fixed rate deals...
If you find a deal your considering post up some details and I can advise with better detail if it looks possible or not...
