First Philly Rental Property - Single to Multi Fam

[Matt Ogden]

I've been on a search over the past couple years to finally dive in to the world of Real Estate! Today, I think I finally found a place which is perfect for the gameplan I want to use: BRRR

The Philly market has been pretty hot recently and we're always waiting for the immanent market downturn, but I think that this property may be able to withstand the test of time.

Here's the breakdown:

Asking price: $135k

(Lets say I offer the full price, although I will ask ~$95k)

Monthly payments: $1,016

Estimated cash @ purchase: $15,700

Estimated repairs: $150k-200k

Potential Final ARV: $275k-300k

Rent per unit: $900-1000

This property is currently zoned as a single family, but I'm sure can be switched to a tri-plex as there is already 2 electric meters and 3 kitchens.  I'm hoping to buy it for say $90k, put 200k into it and then rent out the other two units while I live inside of the first unit.  These units are evenly spaced, but I'm wondering if getting a 200k loan is very unrealistic?  I have enough to pay for the purchase costs, but nothing to put into the house.

I can use a hard money lender, but what are the risks in that?  If it doesn't appreciate to 300k, then I lose money or break even?  I think a property cash flowing ~1800/mo would be a good gamble.

Any other suggestions on creative financing?  I currently rent, so I cannot take out a home equity line.

Thanks!