This was a great location right in the middle of a growing town and he was asking below market value so we accepted and purchased it right away.

By building from scratch and below market value as well as by adding a lower unit

There are several other attributes/constraints of this loan program that you will need to review before making a final decision, and as such, I've pasted a link below that provides detailed information about the Freddie SBL Program.Freddie Mac Multifamily Small Balance Loan Program: Freddie SBL Program - InformationHope this information helps!

Below are a couple of questions that come to mind:1).

What are some of the techniques you use, when obtaining MF lists, to filter out owner occupied units? 

Sherelle – thanks ..there are several versions of the 3 % conventional program…there is one that requires income being below county income limits ( see link below ) and there are also programs that do not have the income limitationThe income limit look up is here - https://homeready-eligibility.fanniemae.com/homeready/Pre-approval is open ended with no expiration date ..we can update data in your file as needed ….credit report does need to be rerun every 4 months …Data needs for pre approval is faitly easy and straightforward ..see checklist 2 most recent bank account statements 2017 2018 W2s 2 most recent paystubs 2016 2017 tax returns ( 2018 when available )Copies of driver licenses Completed loan application and signed initial loan forms I have emailed you the same information too .

If your numbers are correct, this sounds like an awesome deal - in fact, it sounds too good to be true, specially when you mentioned he will even finance the rehab.If you can structure it below, it will be awesome but not sure if the seller will accept it.

That said, few properties will cash flow at below 1%.

I am all about the “living below your means” mentality.

Rent it a little below market rent.