Even though the down-payment is doable, I can't justify losing so much liquidity for something that won't NEARLY appreciate the way a SF or MF home will.

That liquidity will be huge if you want to do a value add renovation, covering maintenance/capex items, or for a down payment on a future property if you love real estate investing and want to start scaling a little quicker!

Location is 02780 Taunton, MAAnalyzed as fully occupied but I will be moving into 1 unit so that will drop the rent by $1350:Rents: $1800, $1600, $1400, $1350Total rent: $6150Purchase Price: $650000Market value: $700000 (based on my market analysis, there are multifamilies in the area with less square footage and less bedrooms that sold above $600k and a couple over $700k)Down payment: $130,000Closing costs: $10000Renovation costs: $0Total out of pocket: $140000Total reserves: $20,000 (stretching a bit with the reserves, have to liquidate some things that I don't want to liquidate, but it's there if I need it, $5000 is liquid at the moment)Mortgage, taxes, and insurance @4.75% interest: $3580 (I think taxes will be lower the first year but just preparing in case the rate is reassessed after purchase)Vacancy rate 10%: $615Management: $200 (I will be keeping the current property manager and he only charges $50 a unit, red flag?

@Jason Malabute the typical over construction issues of being late in the cycle that you mention have been slowed by pandemic and supply chain shocks.Another factor supercharging Liquidity and the real estate market is you have the two largest population groups in us histoey both seeking real estate at the same time: boomers for downsizing, millennials for starting.

(risks: higher interest rates and higher mortgage balance might make it harder to make money on as a rental, if rent prices drop)3) Finish-top floor renovation, sell, and move into a rental, in the belief that the market will 'crash' -- keep realized gains in higher-liquidity account, counting on there being a market 'correction', and be better-positioned to take advantage of.

We have great credit, have about 50% equity in our home, own another two homes we paid for in cash, and have about 25% more liquid cash than what we prequalified for.

The one everyone knows and talks about: Interest rates and total cash liquidity in the market (buying and selling of bonds).2.

HMLs will look at your liquidity to close the loan and credit just to make sure you're good for making the interest only payments. 

Upon executing the buy option will I need to bring 20% liquid to the table with the bank or will they use the built in equity difference between the buy option price and appraised current(5 years from now value)

Everything else is just a mutual fund with no liquidity or marketplace.