Question about 4plex Unit

[Bao Vu]

I am seeking advices on what is the right strategy on a 4plex i found on the MLS.

They're asking $788k, two of the units are about 500 sqft, rents are well below market rates. The other two are slightly bigger at 700 sqft and also slightly under market rent as well. In order for me to start with a positive cashflow, i would need to put more money down (40%) and thats after putting aside a reserve for maintenance, vacancy, Capex, and insurance and prop.Tax.

In this situation how would you approach this deal? Would you take the risk and put less down to get into the property and start out negative to have more capital on hand for updates to justify increasing rent? Or put the necessary down payment to be breakeven/positive? 

Thank you in advance. 

Current rent:
unit 1- $950  — Market Rent $1200-$1300

Unit 2- $960  — same as above

Unit 3- $1375 — Market Rent $1600-$1700

Unit 4- $1475 — same as above

[Tarik Turner]

Another option here is to look at a 30 year term with the first 5 years I/O (Interest only payments)

This option would allow for a bit more cash flow while you are stabilizing the property and also still allow you to put down only 20%-30% so that you can have cash left over for repairs