@Michael Boyer - There are currently no 3 or 4 plexes available on the market, and there haven't been for a few months. Although there is a demand, I have no way of knowingly predicting the after-renovation sale price if I were to go this method. If you have any thoughts, feel free to fire them my way.
@Gerry Gendron I'm basing the HELOC off a 30 year loan at 20% down ($40,000). The lender I'm working through sets up their HELOC as 10-year terms with no principal payments required. They only require you to pay market price interest +1%. In addition, they have no fees or terms if a person doesn't pay within 10 years, and carries the loan over for another 10 years. Therefore, they allow you to pay back the HELOC as fast or slow as you want, while keeping in mind that they are getting extra interest income.
@Cynthia Hairston - I'll send it to you as soon as I receive it!
@Jon Holdman - I've only been approved for Fix and Flip properties and properties of 4 units or less. Since my initial post, I've found the issue that lenders tend to require 25%-30% down payments for commercial loans, along with shortened lending periods. Factoring that in, mortgage rates rise too much for me to be comfortable with. Thank you for the insight.
@Thomas S. - The rent is actually slightly above average for it's location. I think it would be possible to raise rent slightly, but not significantly.
@Jay Hinrichs - Thank you SO MUCH for this information. By the way my lender explained it, their HELOC has fixed terms where no calls or freezes could be made. Needless to say, I'll be making a phone call to my lender today.
@Lana Lee - To answer your questions, the building has been on the market continuously for 7 months (never taken off). Structurally, there are no issues with the building. In addition, all units are currently occupied. My belief is that the seller is asking too much for the market to bear.
Again, thank you all for your sharing your input! After factoring in everyone's comments, I've decided to move on and search elsewhere. The profit will be too slim for my own comfort level, and there are better deals to be found!
