11 Unit Multi Unit Loan, Where to go?

[Cody DeLong]

I'm having a tough time figuring out where to go for financing.  I have the opportunity to purchase an 11 Unit multiplex that all have 1 bedroom/1 bath in them and rent for $600 a month. It's an old motel that was fully converted about 10 years ago with all new plumbing, electrical, roofing, kitchens, etc. It is currently fully rented and has been for the last two years straight.  

The asking price is $275,000 and I have up to 25% of the amount through personal funds and private money. I'm assuming I need a commercial loan because of the amount of the loan. Problem is my DTI is only good for another loan up to $100k as my wife and I just purchased a new house last year and we're almost done clearing out all our other payments (Cars and student loans) Any help would be greatly appreciated. My first thought was to go interest only for two years and build up the financials but I'm not sure.

Purchase Price: $275,000

Down Payment:  $68,750

Financed Amount: $206,250

Monthly Cashflow: $6,600 ($600 Per Unit, could easily raise to $650 bringing cashflow to $7150 Per Month)

Taxes Per Year: $2950 ($245.84 Per Month)

Heating Per Year: $9,000 ($750 a Month)

Electric Per Month: $800

Insurance Per Month: $550 (Estimated at $50 a unit per month)

Repairs (5%): $330 Per Month

Property Management (10%): $660 Per Month

Capex (5%): $330 Per Month

Total Costs Per Month without Mortgage: $3665.84 

The repairs I estimate to be little and I'm more so banking that and capex into a fund to do some updates during turnover as well switch all the units to their own electrical meters.  

[Cody DeLong]

Just an update.  I factored in a lot of stuff here and the numbers still work out to $899 in Net Profit per month.  That is without paying to submeter the buildings (Each building already has separate electric lines pulled for each room, just needs the actual submeters outside.  By getting rid of that and keeping $50 for the common areas I'm at $1649 a month net profit.  After looking at all the rentals in the area and such my plan is to also raise rent to $625 a month for all units affective the month after I buy the place.  This number brings the total rent/utilities for people to $625-$675 a month depending on if they watch how much electric they use.  

I'm going to start a separate deal diary once the buy/sell agreement is signed and try to run everybody through everything with buying the property, including my numbers.