I have spent considerable time looking at this ambitious deal. It is fairly complex, especially for a first time house hack investment. I want to know what I am not taking into consideration & what questions other experienced investors would be asking. My hope would be to refi to a conventional loan & drop the PMI after roughly 3.5 years when I calculated I would have 20% of the loan paid down. (correct me if I'm wrong with any of these numbers)

There are several challenges with this deal & property as well as a few unknown variables which I will address. It is currently a corner triplex row home that is metered with separate water & electric & qualifies for a 10 year tax abatement. There is significant structural damage that leads me to believe a complete demolition & rebuild would be the best way to approach. I know this is possible with a 203k as long as there is a pre-existing foundation. My hope would be to transform it into a 4 story, each of the 4 units having 2 Beds & 2 Baths & a common access to a roof deck area.

Here are the Big unknowns as of now.

- Cost of a complete demolition & debris removal. (In Philadelphia I have found some estimates to be roughly 10k-15k) this would be rolled into the mortgage & obviously known before hand. (waiting to hear back from my 203k contractor on this)

- Cost of Architectural plans (estimating roughly $10,000) separate from analysis. This will allow my FHA consultant to dictated must have components.

- Approval of permits & blueprints as well as the time it will take for them to be approved.

This is my biggest concern, the time it will take for the City to approve the necessary permits & complete required inspections. There are no guarantees as to how long each of the needed items will take & I can only sustain for so long with the monthly payments while it is an active construction zone & not being rented out.

Things to consider, I will be house hacking the deal living in a unit for at least a year & even though I have allocated 10% for Property management fees I will be the PM for the meantime. This all means I will be cash flowing $273 a month while I live at the property.

BP community is rich with knowledge & insight I welcome feedback & questions. This is the 25th multifamily property I have walked through & the 60th property I have seriously analyzed since I have started my journey. If pulling off something like this was easy everyone would be doing it, I'm set in my ways to take a different approach towards my ideal freedom. Thanks for the help!

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