Financing for multifamily

[Han Oo]

Hi BP members,

I would like to ask regarding with financing for multifamily. I am looking for multifamily especially fourplex and I came across with one lender which is offering 2+1 rental hard money loan. I would like to do BRRRR with multifamily like Brandon Turner did in one of his video. So, below will be the hypothetical calculation and please kindly guide me and give me your feedback. I am very appreciated. The reason that I chose this 2+1 rental loan is balloon payment but it has 2 years with 1 year extension. If I go through the regular fix and flip loan, the max time is about 12 months term only. So, I would like to play safe with 2 years to 3 years before I go to refinance with conventional loan.

E.g I buy the fourplex at $200,000 and financing with 2+1 rental loan. My interest is 8.1% and my down payment is 25%. So, I have to pay $50,000 down payment plus closing cost and other loan fees and my monthly interest only payment is $1,012 per month. My gross rent is $650 each, so I am getting $2,600 per month. During the 2 years period, I make sure to increase rent, reduce the expense and fix up here and there to add value. So, during my third year, I go and refinance with conventional loan and new appraise value is $250,000. I cash out $175,00 which is 70% of the new value. So, I pay back $150,000 to my lender and I recoup 50% of my initial investment. 

1. Is that feasible idea? Has anyone done like that before? 

2. Is that easy to refinance up to 70% ARV for multifamily?

3. What if I can't refinance, what could I do? I understand that multifamily will be harder to sell compare to single family house. 

4. Should I go with regular fix and flip hard money loan to save 5% to 10% on my down payment? 

5. Should I try owner financing instead of lender?

Thank you so much all of you in advance. 

V/r

Han