low income rentals

[William Donnelly]

Hello All!

I am a new investor, focusing on small multifamily properties as an owner occupant. Forcing appreciation, new every two, and eventually moving to own a larger number of units. I have been doing research on this, and on bigger pockets.com, for several years altogether and I am finally ready to make my first purchase!

I'm currently active duty Marine corps. I'm using the VA loan to buy a 2-4 unit property. However, I have hit somewhat of a wall. I have been pre approved by my lender and actively searching for properties with realtors in south MS for about 6 months now. The problem is, almost ALL of the 2-4 family properties are lower income "C". I would like to stick with "B" class properties for several reasons. The main one being my family and I will be owner occupants.

Other than simply waiting around for another good multi to hit the market, or driving for dollars, etc, which i'm still doing- i'm currently left with two options:

1) Theres a "A" class duplex, higher end luxury, foreclosure that has been on the market several months. It only needs minor repairs according to the contractors i've had write up estimates. Comparable rents are 1000-1300 per month. Right now, one side of the duplex is occupied by section 8 paying only 800 per month, lease ending in Jan. 2016. The listing agent says there has been no interest in the purchase of the duplex so far, as the bank is asking top dollar 250k. The listing agent says to just make an offer, ANY offer, and the bank will likely consider, as the bank still owes money on the property as well. 

My realtor and I are thinking about offering 70k below asking. I've ran the bigger pockets rental properties calculator analysis, and that would be a good purchase price for my to make this property a successful investment. My question is, how low can I go from the asking price for a "reasonable" offer on this type of foreclosure?

2) I'm also interested in new construction. The small multi family market here is not very strong. So for me to build one would eliminate the incredibly difficult task of finding a decent property to purchase. I am looking to close on the mortgage BEFORE construction begins, so that all rates and stipulations are locked in now as opposed to over a year from now. I know this can be done, as i've ran across several articles of people who've done it. I just don't know if it can be done with a VA loan. Does anyone have any insight on how to close prior to beginning construction on custom builds?

Thanks in advance!