Prices a few years ago were based on expectations of (in addition to interest rates staying low): - Then current operating cost assumptions (like insurance cost expectations being flat)- A seeming disregard for record levels of new inventory / supply hitting the market- Extremely high inbound migration expectations which are likely to not be met, due to both natural disasters and the boomerang effect when people from California or the Northeast move to the American South and hate every minute of the humidity, the large and relentless swarm of insects, and the occasional hurricane. 

In addition, education can only teach you so much - what type of experience-based learning do you receive when joining these teams? 

The unobstructed water views for both front STR units can be challenging to determine additional value compared to other 3-unit properties without views.

Additionally, his credit is not the best, and he has limited funds for a down payment.Any potential options or solutions that may be available?

Quote from @Eamon Conheady: I was purchasing a multi family through an IRA LLC and was utilizing debt to finance it, requiring a non-recourse loan.

In addition, due to them being eligible for conventional non-commercial financing they typically have lower cap rate than 5 units and more.  

If the water bill is $100 a month, increase the price by 20% (or whatever you decide is fair) to compensate you for the time required to split and bill and to cover additional use when tenants squander the utility.

Additionally the renovation costs are going to be higher as you have to re-draw the floor plans a bit (and add in sprinklers bc its a four fam) but the great news is that you would be able to finish the attic to create larger units on the second floor and get more rents.

Looking at this as a strategic addition to my portfolio.

Additionally, we are approved with the Better Business Bureau (BBB).