Hi Brian, the majority of hard money lenders want you to add the rehab money to the loan.

Congrats on taking the leap! 

But in my opinion, the biggest issue I see with folks jumping into their first "big" multifamily deal is the quality of the pro forma. 

.: @Jay Hinrichs  Why do you prefer PR over PS?

You look for comparable sales for other distressed properties that are similar and nearby and also counter that with finished version comps so you can see what your perceived spread could be.

Quote from @Timothy Hero: I've brokered over 325 DSCR loans.

You are training the tenant on exactly how to $crew the next LL.  

That means I have roughly enough for cash to close, but no reserves left over.

@Jennie Berger The RS-3 Zone allows for Single-Family residences & 2-Flats as "Permitted Uses"; however, the RS-3 Zone still requires 2,500 sq.ft. of lot area per unit (i.e. 5,000 sq.ft. for a 2-flat) unless the lot meets the exception for the characteristic of the block as previously mentioned by Nicolas; then it can be reduced to 1,500 sq.ft. per unit in order to construct a 2-flat.

It would be wise to post the name of the franchise you are considering.