[Calc Review] Help me analyze this deal

[Joshua Walker]

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hey everyone!  I need some of the experts that post on this forum to help me out on this deal.  I've been investing in single family homes for a few years and have acquired ten properties in that time.  This would be my first multifamily investment.  Currently the property is setup as a daycare that previously was a duplex.  The property is pretty dated and will need updating, kitchens and bathrooms added and the wall that separates the two sided of the duplex replaced. The calculator does allow for the specific details on this property. Basically I would be doing a subject to loan with an initial purchase price of 100K putting 20K down paying interest only at 5.5% until the remodel is completed. The bank will finance the the rehab and once everything is done lock in the interest rate at 2 points above prime at that time.  Then it would be a 5 year fixed 25 year amortization type loan. I'm expecting the rehab to take about 6 months and I should easily be able to get $1000 per unit in rent.  I would not be cash flowing much, if anything during the 5 year period at the current interest rates.  

Here's the tricky part,  I hoping interest rates will go back down during the 5 year fixed period and I can do a cash out refi at a fixed rate somewhere around 4% over 30 years, where it would cash flow pretty well.  I would do the refi in my personal name to try to get that lower rate.  

Please share your thoughts on this. I'm pretty torn on this one.