Small MF in Sealy, TX Financing Hurdles

[Nicholas Welch]

Hey y'all! My name is Nick Welch, and I'm looking to get started in real estate (aren't we all?). I'm posting here because I reached a bit of an irritating impasse, and was wondering if any of the far more experienced and intelligent members of the board could help me with my little dilemma!

Here's the basic situation: I found a property not too far from where I live that seems like a really solid bet—4plex, all 4 units are 2/1 and the building has a new foundation, roof, and various cosmetic fixes done on the outside of the property. The asking price is 215k, but considering they bought it for 107k earlier this year and themselves recognize that the units need quite a bit of updating and rehabbing, that price is likely flexible. Based on comps in the area, reasonable rents for each of the units (900 sqft each) is somewhere between $750 and $800. 

So what's the issue? I have no idea how to fund this! The main roadblock is that I'm under lease at an apartment complex until April of 2021, so any sort of owner-occupied loan is unfortunately out of the question. I don't have the capital (nor the credit, unfortunately, but this is being mended as rapidly as is possible) to do a conventional 20% down mortgage, and so I've been trying to figure out ways to make this deal work. Assuming the units wouldn't be rented out until rehabbing was completed, there'd likely be at least a few months that the property wasn't cashflowing at all until I could get the first unit fixed up and occupied. Those holding costs would hurt rather bad, as my W-2 income could barely sustain the types of loans I've thought of thus far (for both private and HML, I'd be paying well over $1,000 in interest alone every month) since I'm having to also pay rent at my apartment complex and other miscellaneous expenses.

If I have to pass this deal up, it's by no means the end of the world, and I can at the very least say that I've learned a decent amount about a new market through analyzing this deal and researching ways to possibly make it work. If anybody has any advice they can give me, or show me where I led myself in the wrong direction, I'd massively appreciate that!