First time Property Deal? Loan HELP!

[Jessica C.]

So I have been trying to get into real estate investing and have decided to take the dive, I have researched and read various books however its one thing to read something and another to have experience. Thats why I NEED your advice!

I am interested in buying this property it is a 5 unit (4-two bedrooms and 1-studio). It is listed at $125,000, the rents I would get per month are (all units pay their own utilities)

INCOME: rent1 775 rent2 775 rent3 750 rent 4 750 rent 5 400

TOTAL: 3450 a month or $41400 a year.

EXPENSES (all expenses including taxes, not mortgage) =

TOTAL: 999.08 a month or 11989 a year

So far the deal seems good, but the HUGE problem is figuring what to do about the mortgage. Do I go commercial? or Do i use a FHA 203k to convert the 5 unit to a 4 unit to get the lower interest rate and down payment. Or I was also told I could use a collateral loan to get the funds at a lower interest rate and longer term.

In summary I have MAX, 30K to put down. When it comes to a collateral loan my father would take it out for me and he owns enough property to get one (not multifamily). Also to note the units need some work a high estimate is 80K (should actually be around 50K, but you never know what you may run into) I am hoping to get a deal on the 125000 asking price because it is a foreclosure.

Any Advice on loans?