6-Plex too much for my first deal?

[Dan Buhr]

I'm brand new to real estate investing and found a 6-unit multifamily house in my area. From what I can gather, there are around $10K in annual expenses (insurance, heat, electric, water, taxes, upkeep). $100K is asking price and annual rent income is $36K. If I am able to get financing to put 20% down, this should cash flow well on paper right? What strategies should I look at? It needs some help to bring units up to nicer living standards, possibly could pull in better rent and tenants as well. I don't fully understand commercial lending process and could use some help knowing what options are available if/when I get financed.

[John Warren]

@Dan Buhr I definitely do not think 6 units is too much to start with, but it sounds like you have a lot of education to do before you take this deal down. The income makes me think this is probably in a rougher area of town. Be careful if this is your first foray into multifamily taking down a C or D class property. Also, consider how you will mange the property. Will you be the PM? Will you hire one? 

Commercial financing is pretty simple. They will make sure you have 20-25% down, and they will make sure you have 6 months of payments in the bank after closing. If you have good credit and the building is occupied, you will be fine. Most loans will be 20-25 years of "amortization" with a 5 year "term". Interest rates are in the low 5's these days, although you may be charged a premium for a small deal like this.