Multi family Acquisition Strategy

[Cody Stuck]

Hey All!

Looking to secure my first property and would like your thoughts.

Acreage is 0.89 in a c+ neighborhood

4 Plex stand alone houses rents all at 850

Purchase price at 450k

FHA with property Tax at 3600 annually

Premium insurance at 307 monthly

APR at 4.79%

Interest at 2.99%

Assumptions: vacancy at 5%, cap ex and repairs at 5%

My thoughts running the numbers it’s “bad deal” however this property could fit commercial requirements with an option to build 2 more units. Assumptions for 850 for rent on those units if built.

Assumption for modifications to the property to force appreciation at roughly 5 to 7 percent first year and a YOY appreciation at 2%

My thought is to secure the property at FHA then refinance to conventional...do you feel that makes sense or could there be another option to make this the right deal?? What are your thoughts?