First deal, 5-unit. Rehab or run?

[Zachary Gross]

I'm new to BP - this is my first post and I've only recently become obsessed with real estate - consuming everything I can get my had on for the past 4 months. Sorry for the long post, I'm a details guy.

I currently live in a RV since I travel for work, but I've been fortunate enough to find regular work back home in Michigan for almost a year now. Since RVs don't like the cold, AND I've been obsessed with getting started in real estate, I was looking to house hack my way into a rental over the winter (and maybe another next winter and the winter after that)

Unfortunately, with the market so high, the multi-family units listed in decent neighborhoods here have terrible numbers, so I figured I'd have to start looking off market... That is, until I found this deal that I'm currently looking at. I'd appreciate any feedback I can get.

What is it? 4 unit house with a converted garage (fifth unit) fully occupied (until recently) the rents were 2850

after rehab of the two units rents could probably be around 3000

ask: 125k (2 tenants recently moved out and both units need to be re-done prior to renting again. Owner's handyman is having health issues and repairs have stopped. Owner is willing to negotiate if sold as-is)

owner represents average of 11-1300/quarter in gas and water when fully occupied.

ive only got 10k set aside specifically for investing (just started saving maybe 3-4 months ago) but could probably borrow enough for a 20% down payment. My income should be enough to allow me to do repairs myself over the next couple of months. Even with 2 tenants gone, the estimated cash flow is neutral at my worst projections if I self-manage (10% vacancy, $285 maintenance (including capx) and full price utilities)

granted, I still have to confirm financing, as I don't know if loan terms I've been quoted will change getting into anything above 4 units.

i was thinking of trying to get it for 100k + 5k concessions to lower my initial investment. To my knowledge, they don't have any other offers and haven't for some time. Plus, it's pretty low/SF, so I'm fairly confident that I'll be able to cash out re-fi if I can get the rehab done while the market is still up.

I have considered attending some local meetups to see if I can find someone with more experience willing to partner. Do you think this would be wise? If so, anything I should be cautious of?

if you think this is a deal i should stay away from, also let me know.

thanks,

Zach

note to admin: I don't believe this post violates the guidelines set since I'm not explicitly asking for or offering a deal. If I'm mistaken, let me know and I'll sign up for the pro membership.