BRRRR Commercial Real Estate Question

[Jacob Murphy]

Hi BP Members, I have been using the BRRRR strategy for 5 single family properties now but would like to start looking at bigger properties to help scale my business. I recently found a 6 unit commercial property:

4 residential units upstairs (3 bed, 2 bed, (2) 1 beds)

1 hair salon 600 sq ft

1 vacant bar 2000 sq ft

Total rents per month with bar = $3500

I am interested in putting in an offer. I'd rather not spend the money and go through a bank for traditional finance if possible. Asking price is 165K. ARV when fully rented is 240K.

I'd like to put in an offer for 165K with 5K down and no payments for 12 months. Full balloon payment due at the end of 12 months. If the contract was accepted, I would renovate and rent out the bar plus raise the rent of the hair salon from 400 to 600 per month. After I would cash out refinance for 70% of the ARV. I expect to receive the full 165K back.

Do you see any issues with the structure of this deal?