Creative Financing Challenge: 850k 4 unit

[Alipate Moleni]

I'm looking at an 850k 4 unit property which currently brings in 7k rent. I don't need help analyzing this deal; I'm looking for ideas on how I can finance this purchase and end up sole owner.

Here's what I have:

115k HELOC

30k cash

Pre approval for 300k conventional loan.

750 credit score

Let's assume I don't have any friends or family willing to help me out with this.

Got it? Ok, ready set go!

[Chris Jeffries]

250k equity implies an outstanding balance of 600k.  Ballparking the existing P&I around $4k a month (20 year am, 5% rate on 600k - the amortization might be longer but probably on a higher balance) which is well over 50% of gross rents.  $3500 is 50% of rents so let's use that for this example.

If your OpEx ratio is roughly 40% that would leave 10%, or $750 to service the carryback with you getting $0 cash flow.   If you gave them $25,000 down and they carried an interest only note at 4% you would not cash flow ($250k - $25k = 225k; $750*12 = $9000 / 225,000 = 4%).  

Is there upside in the rents or are they at market? If there's upside this might work but it seems pretty tight otherwise since the numbers above don't include any closing costs or residual cash flow to you.  I'm new to creative financing so hopefully others can chime in with some alternatives.