Buy & Hold or Rehab deal structure

[Edward Beard]

Hello all, I am a buy and hold investor but I came across a property that may have huge rehab profits. I've always wanted to rehab, but never had the balls to actually go through with it, I would just wholesale it to someone else. Property Details: 4-plex, (2) 2br/1bth units & (2) 1br/1bth units OR if converted 6br/4th 2,850 square feet. Currently 75% rented bringing in 1,775 in rent (there is room to increase rents) Asking Price: 400k There are converted comps at 676k & 755k After speaking with the owner, he stated that he was going to attempt to convert it and gathered estimates that totaled up to 100k in repairs. He's also willing to owner finance 200k. Here are my questions: 1) Does it make since to took keep it as a 4-plex and hold it long term? To me, the price seems too high and the value is in converting the property. However, values are increasing in this neighborhood and given more time, property values could increase more. 2.) How would lending work with this property? I don't have all the cash necessary since this is a higher end deal. The owner is willing to carry 200k, if I were to reach out to a HML, how would that structure work with the owner finance in place? Thanks for all the assistance in advance.