How to make an expensive 4 unit property at beach work..Need ideas!

Question

Good afternoon! I need some ideas for how I can make a multifamily property work in Jacksonville Beach, FL. This is an offer market deal I found while writing letters and the seller call me with interest to sell. I am typically a buy and hold investor so that was my plan for this but Ive found it hard making that work. The ask price of around $730K and there are comps in the area over $1-1.2 mil. There is a ton of value add opportunity. It is about 4 blocks off the beach and close to the town center. 20% down is about $146K and that is without rehab. I believe in this market and believe it will appreciate over the coming years. With interest rates being so high and hard money being so expensive, I am having a hard time figuring out how I can make this happen.

Are there any ideas for how I can finance the down payment and rehab for this property?

Property Details:

4 unit multi family home at $730K. All metered seperate. Rents foreach unit around $900 each but market rent for LTR is $1500-1600. There is a solid MTR/STR opportunity with the units that could generate even more return. Insurance estimated at $7,000 annually and taxes around $10,000 annually.

Ashton Fry · Answer

@John Karg I just sent you an email. Thanks for responding to this thread!

Ashton Fry · Answer

@Eric Traveler Thank you for the input! I am currently looking into a HELOC and I like this strategy as an option. Hoping I can get this seller UC

Ashton Fry · Answer

@Stephen Booth The seller is 90+ years old and is starting to consider letting this go. He does not need to sell so there isnt any urgency from his end. Unfortunately, he is not interested in seller financing option.

The juice may not be worth the squeeze on this one but I am trying to figure out a unique way I could make it work. Appreciate the advice. I will try and connect with seller again to see if his numbers are flexible.

Stephen Booth · Answer

@Ashton Fry, what’s the sellers motivation? Seems like purchase and rehab need to total around 750-800k. Even at that, LTR might be near break even. If they need the money now, I would try going back with a price that works and see what they say. If that’s not it, maybe a seller financing opportunity with a low down payment to get you through rehab?

If wholesaling or partnership is an option for you, I may have a cash buyer but 730k may still be too high. DM me if you want to chat more on it.

Ashton Fry · Answer

@John Karg Thanks for the response. I have looked into convential and hard money options but dont have that downpayment on hand. I could possibly pull a HELOC on one of my properties that I have about 200K in equity, but I wasnt sure if that was best option.

John K. · Answer

Hi Ashton,

It just depends on how much cash you have to put towards the purchase and rehab. Conventional will give you the best rate and no PPP, but requires 25% down and won't fund the rehab. Hard money will give you more cash to work with but has higher rates. A DSCR loan could go up to 80% LTV but has high rates unless you accept a PPP.

Feel free to reach out if you want to talk it through in more detail, and we might be able to find a good option.

John