0% cashflow for 3-4 years

[Jonathan Bombaci]

I am working on a deal. 12 units in 2 buildings in northern NH for $380k with $60k coming back to me at closing, net price of $320k. I structured it that way to reduce my cash outlay to less than $25k. The property grosses $100,800 today after expenses, pm fee, vacancies, and debt service it should cashflow $25-$30k a year with +15% cap. It was looking like an incredible off market deal. However during inspection we found $100k worth of major repairs ($35k furnaces, $30k electrical, $15k roof, $10k fire escape, $10k sewer pump). If I put the $100k into the price it reduces the cap to 9.2%. I see mostly 5-8% caps on the market in the area. 

So it makes sense on paper but I don’t have $100k to do those repairs which is why the offer was the way it was. I’m thinking of spreading the repairs out over 3-4 years and reinvesting the rents into the repairs. So I’d have 0% return until year 5 but then get 100% of my Money ($25k) in 1 year and then profit from there. 

Does this make sense? I really like the property and this would bring me to 24 units in the area. I’m excited to see the benefits of scale. But I also see this as potentially writing checks my *** can’t cash... what do you think?