6-Unit Investing Scenario (numbers included)

[Raymond Wu]

Hello BP,

I currently have about $20k in the bank and I was considering purchasing a 4 family unit using an FHA loan, but my realtor just showed me a commercial 6-unit building, with the seller willing to finance the remaining 20%, while I put down the 20k (~5%).

I'm a relatively new investor and just closed on my first property December 2016. This deal feels like an opportunity because the seller is willing to finance the remaining 20% with a 5-year balloon payment at an interest rate of approximately 6%. Just wanted some feedback and thoughts on the deal.

Would it be wise to execute the 6-unit deal first then purchase a multi-family with an FHA or vice-versa?

Here are the numbers:

Price	$ 369,000
5%	$ 18,450
Seller Finance 20%	$ 73,800
rent roll
$ 900
$ 940
$ 975
$ 975
$ 1,033
$ 1,050
total (monthly)	$ 5,873
Annual	$ 70,476
EXPENSES
Tax	$ 11,000
Utilities Expenses	$ 9,360.00
heat & hot water	$ 6,000.00
insurance	$ 2,800.00
NOI	$41,316.00
CAP	11%