Please Help, Multifamily deal?

[John Gray]

I looked at a multifamily property yesterday with my wife (realtor) in a C neighborhood, up and coming B neighborhood. We are looking for out first investment property. The owner is retiring and moving to Virginia and is looking to cash out. He still has a mortgage so i don't think i can do a seller finance deal. The house is large for the area, 3/1 on the left and 4/1.5 on the right. there are also some extra rooms in the basement (finished) for possible studio apartment, coin laundry or paid storage, not confirmed if feasible or allowed by the town. The owner lives in the 4 bedroom and has been renting the 3 bedroom for $1800 (section 8). The units have completely separate utilities including water and even sewer. separate driveways, parking etc.

There are signs of very old fire damage, prior to current owner of 50 years. there is also some structural settling with an engineering report (owners says he never had a problem)

so the numbers,

asking price $390,000

Rent in current condition 

3/1                                         $1800

4/1.5                                      $2000

taxes                                      $850 per month, $10,200 per year 

insurance                               $75 per month,   $900 per year

property management (10%) $380

vacancy (10%)                       $380

repairs (5%)                           $190

So my first question is about financing, I don't have enough for the 20-25% down investor loans and we don't want to live there.

I do have an interested investor but i am unsure on how to structure the deal and present it, equity partner, debt partner, private finance?

My second question is, whatever structure you think is best, is this property still a deal, does it cashflow?

If i left anything out please let me know and thank you for your time.