Advice on First Deal - Duplex

[Grant Waugh]

Hello everyone. I'm Grant from the ATL area and i have been wanting to get into REI for a few years but just got serious within the past month or two. I am at the point where I am ready to dive in. I had lunch with a friend who has been investing for over 10 years. We discussed partnering on deals in the future and right after we met, I found a potential listing and this may be my first property if it works out. I am seeking advice on a few different aspects of the deal. Mostly revolving around financing the deal.

The property is a duplex listed for 99K. Both units are currently rented out. I am awaiting final details but I understand that one unit has a year lease left and the other has two years left. My goal is to buy and hold the duplex and rent both units out or live in one of the units if necessary to acquire the best financing. Once the leases are up on one or both of the units I would remodel them to raise the rent potential

I have reached out to Navy Federal bank to get info on loans and they will me offer a few options:

FHA for 3.5% down

Conventional 30 year fixed with 5% down with no discount points or originations fees @ 4.625 %

or

Conventional 30 year fixed with 5% down + origination fee of .875 %  @ 4.25 %

Investment property loan 15 year fixed with 25% down @4.375 %

With the FHA loan i would need to occupy one of the units within 60 days to qualify. 

I also may have the potential for private money lending. I have a few resources available but I haven't reached out to them yet to make sure they are on board with the deal. I am also not sure what terms they would require for the deal as we have never discussed these in detail. One potential lender has been approached and verbally agreed to loan money in this situation.

I have the cash to cover the down payments on all of the loan options discussed but would rather use as little (or even no cash) of my own cash as possible. 

My questions are:

What is my best financing route here?

Is there a way of getting around the 60 day owner occupancy rule with the FHA loan? If not, is the investment property loan worth it?

Is it better to try to go for private money lending and use the cash to negotiate the seller down?

What kind of rate/deal is common with private money lenders for this situation?

What would be the difference between using private and bank financing in terms of the ability to negotiate the seller down? Wouldn't they get paid cash whether it's from the bank or a private investor?

Thanks in advance for any advice.