If you took out a separate loan secured by the second property, and that will be used as a second residence, then it is potentially deductible - subject to all of the other limitations of personal mortgage interest like the $750k balance cap.

The buyer had an inspection and has requested for some cap ex repairs (new roof and new sewer pipe).

If he is making monthly payments of ($1,394.49x12)/135k= 12.39% cap rate.

HOAs on CA have recently swung the pendulum to cover cap ex expenses that were differed for years.

. $2,200 for 6 units will likely not even cover maintenance/cap ex but we will say it does.  7% PM is $770.  5% vacancy is $550.  

hey @Shaydon Childersmost responses are right, this will be challenging for traditional DSCR as they dont like gift of equity; and seller credits would be capped (usually at 2% of your purch price) and only allowable to be applied to closing costs. i have one lender (specifically for 1-4 unit investment properties) which will allow for up-to 90% CLTV... and they are okay with seller financing so long as the seller is in 2nd lien position, allowing them in first lien position. they would max at 75% LTV on their 1st, with a 15% allowable seller-carryback (90% CLTV), and then up to 3% seller credits toward closing costs too. they offer 30 year fixed rates, however, due to the added risk for the lender, the rates are going to be much higher than the traditional DSCR loan.

To start, I'd do a Discounted cash flow analysis and cap it like a regular income producing rental....do you know the rent the tenants were paying in the two sales you showed?

Low repair/Cap Ex and great potential appreciation.The one thing to keep in mind is which property is likely able to help you scale faster?

Our property taxes on multi-family are capped annually at 3% max increases which help with annual tax lightning. 

They argue that their renovation is top notch, so the price is justified, which may or may not be true, but but generally the high quality of the renovation does not pay sufficient dividends in the form of increased rent, so the price to rent ratio just isn't there.They typically advertise a 9% to 13% cash on cash return, but be careful, this is their "first year projection" and in their first year they do some things that I find a it deceptive, such as not accounting for vacancy because they place a tenant prior to closing, and they budget essentially nothing for repairs or cap ex since it is renovated and they offer a warranty.