It seems like a good deal, but...

[Brad Ourada]

I'm new to Bigger Pockets and need money, anyone here willing to loan me money? Just kidding, I'm on episode 30 of the podcast and I think I've heard the guys complain about people doing that 500 times already. 

In all seriousness, I am new to bigger pockets. I have three single family homes, my primary residence and two rentals. Both of the rentals have solid cashflow. I'm now looking at a quadplex. There are no comps for this property in the area. A portfolio lender is willing to give me a loan for the purchase on a 5/1 if I put 20% down. They are also willing to give me a $38k LOC secured by the equity on my other two rentals at 3.99%, capped at 10%.

Rents for the four units would total $2200/month ($26400/year). $1000/year for insurance, $2750/year in taxes, $2040/year for water and sewer, $960/year for gas, $1800/year for maintenance and capex (I do all labor myself). I manage the properties I have, mow, ads on craigslist, etc. No other major expenses. 

As I understand this... I have $8550/yr in expenses not including debt service. With $26400 in gross rents, this would be a $17850 NOI and a 14.8% cap rate if I paid asking price. If I paid the down payment, I would be looking at $9930/year in cash flow. If I utilized the LOC to make the down payment and paid it off within the three year term, it would cashflow $0 for the first three years. Paying the down payment isn't very appealing, my wife and I are adopting and would like to keep the cash on hand, but I don't know about the margin if I finance 100%. I've heard/read people talk about BRRRR, but I don't really want to count on that since I don't have comps.

I lived in my first property until I bought my second and it made sense to rent it. The second property was under ARV and an easy decision. I've never really had to do analysis and have never owned a multi-unit property. I would really love to hear any thoughts you all have. Please forgive any glaring lack of information as a rookie mistake.