Commercial zoned, is conventional loan on 4 unit an option?
I've come across this opportunity of a 4 unit apartment/multi family property. It's as follows; 4600 sq ft, 2/1 concrete slab, vinyl siding (needs replacing), new roof last year, all units renovated 2 years ago, section 8, asking $139,900, units rent for $500 each ($2000 gross). T&I $1800 annually. Built 2002.
I've run the number on a conventional loan, 25% dp, 30 term, PITI looks to be around $700.
Looking at property data last night and discovered it's zoned commercial. This is where I ask for more information. Are conventional loans eligible for this type of property? It's all under one roof, on one slab foundation so I was hoping it would be. Bank loans allow for higher LTV but the rates and terms aren't as aggressive. (Roughly 5% rate at 75% LTV on 360 term $700 per month vs 5.625% at 85% LTV on 5/yr balloon, 240 term $950 per month)
My long term goal is to buy and hold. I'm not investing for cash flow now as I work full time. Like so many, I'm trying to build toward the passive income model. Is this opportunity even a good move for me given my long term goal? I am not sure it's a great "equity" buy at this price but it will seem to cash flow marginally on the 20 yr term while building equity.
Another question, with my goal of buy and hold, I would be tying up a large portion of cash for the dp and cc. What are the costs of lost opportunities with my cash being invested in this unit?
I know most of these questions are mostly for me to answer. I needed to write them down and thought I'd see what suggestions you, the folks of BP, would suggest/recommend/offer.