4-plex rental income analysis

[Justin Pumpr]

Hi all,

I'm considering purchasing a 4-plex, but when I'm running the numbers I'm getting some pretty different outputs based on worst and best case scenarios. This mainly comes down to the rental income. On the conservative side I'm looking at negative cash flow, but on the higher end I'm looking at ~$600/month cash flow (based on converting the 2x 1-bed units to 2-bed units. The high end rental income is definitely do-able and not very far fetched (it's possible it could be even higher), but there's no real way of knowing which way it would skew. Does anybody have any recommendations about this deal? I've attached my numbers in this link: 4-plex Analysis

To finance this deal I'd take a hard money loan for the purchase and use a HELOC for renovations and carry + closing costs and then cash out refi into a traditional. As the cash out is only 70% of the ARV, I'd need about $40k out of pocket at the end of the deal to close everything out.

I'd love to hear any thoughts on this!