I would count on having at least half market rate tenants, in the event Section 8 rents are higher than market, which they are in our market (granted you will need to subtract the utilities from the rent).  

Still, we are looking for more granular data that breaks down by unit configuration closer match to the minimums set for each military, rank) plus estimates for the costs of utilities. 

Then there are the challenges with Section 8 tenants paying utilities and taking care of their rental property.

I Offered it to them at 10% below market with him paying utilities. he wanted it, so I screened him to verify he can afford it.

That's the reason there are so many fourplexes and so few fiveplexes or even sixplexes.From what I gather, post offices and utility companies rarely care much about the permitting/zoning issues, so it probably wouldn't have been hard to get those set up.

Start with a standard offer, and write a contingency into it for electricity, all the below ground utilities, and then work your way to zoning, permitting etc.

Estimate utilities and figure out who pays them (separate meters, landlord paid, etc)5.

Then I would speak with a land surveyor or civil engineer to get a sense of what it would take to obtain all the entitlements and bring in the utilities, etc.     

Prepare for additional costs: If you’re adding units, you’ll likely need to address the water meter situation and possibly upgrade utilities.

So all in all, the investment seems solid to me, and this is not my first rodeo, as they say.As for the risks associated with the SBLOC, I minimize those by only utilizing a portion of the LOC so that even if the market drops another, lets say 30%, the risk of margin call is slim.