Multifamily Build Scenario

[Ronald Fontenot Jr]

I'm looking for input on this scenario...

I own a piece of land on which to build a 4plex with 4- 2/2's. Cost to build is $400k. Assumed ARV is $575k when complete.

Finance out $400k at completion at 7.6% on a 30 yr note. Setting aside $600 month for vacancy, maintenance and capex. Tenants pay utilities.

Unit rentals at $1500 per month each or $6000 per month total rent.

My calculations show that if no down payment is necessary, the property would produce 1.23-1.35 DCSR depending on the method. Cash flow would be $962 per month. Considering 10k in closing costs, it would provide CoC ROI of 115%.

Using conventional financing, will the LTV of 70%, or the land value, negate a down payment? What about DSCR financing?

Thoughts? What am I missing?