Buying 2 fam, convert to 3 fam

[Bobbi Casalino]

Hoping to win on terms with this one: PP: $1.5m. Needs gut reno -new elec, plumbing, remove interior staircase/ add exterior stair, remove hallway walls which are structural/ load-bearing, etc  ($200-300K) AFV $3m. The location in North Brooklyn is "A" and appreciating, tho in the next few years who knows, but who cares? Im buying to hold. Rental income should be 120,000/yr.  Buy with 400,000 DP with cash-out refi from my 8 fam. (What int rate are you all paying?) Then pay Seller 8,000/mo for 5 yrs. I plan to cash-out refi once I am able to (is that 3 yrs? 5 yrs? or based on equity?) and pay off seller... unless they'll want to finance me and collect 5-6% interest-  Depends how much interest rates will have dropped by then and what my cash-out refi rate is. 

I follow Pace and Jerry Norton like crazy. How are the bones of this deal? My brain is exploding trying to piece it all together, never having done it before. I welcome your insights on the deal and recommendations on how to determine what can be reconfigured and at what cost, the permitting process in BK and your experience digging out a dirt basement in order to create a duplex (basement is 100% below ground level)

  Thank you