It may just be that the seller wants too much and there is no solution but I was hoping investors with more experience than myself in this area could provide some insight into how they would value this and how much of a hit to cash flow would be acceptable in exchange for future potential.The details:4-unit purpose built building in an average residential areaCap rates for 1-4 unit properties range from 6-10% depending on quality, location, conforming vs non-conforming etc.Asking price $520k, dropped from original $550k and has been on market for a few monthsRents are ~$34,000 and should be ~$48,000Expenses (excluding maintenance) are ~$9,000 - This puts the asking price cap rate at ~4.7% (not including maintenance)- We estimate that at asking price it would be about -$260/month in cash flow and break even at a PP of ~$450k assuming our typical 10% of rent for maintenance- We estimate the building would be worth around $530k at market rentsWe were thinking the cash flow neutral price would be our best offer, but their indication was that they are looking for close to 500k. 

I'm running into the limit on # of fannie/mac conforming loans (I thought its 10 properties total, but apparently it caps at 6 investment prop). 

I was told by a member of the Taunton zoning commision as it is now its a legal small multifamily but the zoning ordinance states that if the property is damaged 65% or more (determined by the building commissioner) through fire, flood, wind ect. then it has to be rebuilt conforming to the current zoning laws, which is single family only for that area.

You just need to ensure no disqualified parties are involved in the transaction, and that the note is in conformance with state lending laws/disclosures.

Its a duplex non conforming, now its zoned commercial.

And I'm very aware of the positive correlation between yield and risk, though there is also something as just bad deals where either rent or price is not conform market.

My understanding is that conventional loans are conforming loans and those loans must conform to Fannie / Freddie guidelines.  

If a bank sees you consistently doing profitable deals, that lowers their risk.Personal Property: if you're making the money, you'll get the loan for your personal property in 5-10 years.2 Years Performing Asset: what to keep in mind with all of these "rules" is that they usually reflect rules for a "conforming" loan, i.e. one that will qualify to be sold to Fannie/Freddie as noted above.

I want to get 3 conforming agency loans to close simultaneously.Appreciate the help

Any experts out there with some insights on non-conforming, grandfathered, weird properties...that might not have similar comps, hence making it harder to find a loan, etc?