4-plx in A+ neighborhood, will be owner occupied. Is this a good deal?

[Shannon Sadik]

Hi, 

I'd like your advice on a buy and hold I am contemplating purchasing. It's pre-MLS, so I have to make a decision fast.

Asking price: $499k. Lender requires 25% down for a 4plex with conventional financing, or I can do as low as 3.5% down with FHA BUT that requires $516/mo for Private Mortgage Insurance.

We could put 25% down, but I don't think it would be wise. We can re-fi and lose the PMI once we hit 25% loan to value. If my calculations are correct, that means by Y9 or 10, we could refi.

Possible scenario: 

Offer price: $475k (my realtor thinks this is reasonable number since it hasn't gone on the MLS yet and these deals go quickly; thoughts?)

Rent: 4 units x $1500/mo=$6k

PMI: $516/mo

Property taxes: 4% (I know. It sucks)

Down payment: 5%

+ mortgage, 15% capex/maintenance reserves, insurance, and $800/yr for all tenants' water

No Property management as we will do it ourselves

Vacancy: 0% (it's a highly desirable area and these are very nice apts)

No additional work needed

Cash on Cash: 30%

Net Cash flow: $609/mo. 

We plan to live there for a few years so we could actually live in highly desirable (and expensive) area for $665/mo. 

For the money down, and the area, it seems like a good deal, but this is a LOT of money and this is our first buy and hold so I'd appreciate your advice! :) Would you buy this apartment? What would you put down? Is it worth it with the PMI?