How to structure a deal for a 6 family using seller financing
Hello Everyone, this my first question have been following BP for a while now and have learned alot from this site. However I came across this deal I don't know exactly how I can finance this buy and hold.
Today I saw a 6 family unit in the Bergen Lafayette section of Jersey city. The owner is a 65 year old retired electrical contractor who owns the building free and clear. He maintained the property very well, no immediate renovation issues were seen other than dated kitchens and flooring. It been on the market for 151 days , price was lowered twice from 524000
He is offering the property at 474000, Taxes- 8000, and Rent roll 5300 fully rented all 2 bedroom buildings. Rents range from 975 to 850.
I have 50000 for downpayment on the property. I know most commercial lenders require 25 to 30 percent down. Me and owner talked for well over a hour about the location, how he has seen the area improve with the opening of the light rail whiten walking distance. I brought up seller financing with him , he seemed interested but stated when he sold property before he always got the full amount and he asked me to explain it to him. At this point I was scared out of my mind since this was my first deal and I don't think I actually knew how to explain. So I brought out my phone to show him the numbers and told him how he would be my bank basically . I was willing to give a 10 percent down payment, and he would finance the rest at a 5 percent with a balloon payment at the end of three years for the amount due. I was planning on refinancing at this point Thou he seemed like he was interested, he then stated I usually once I am done , I am done. He would like to travel back to his country and live there. He was already clearing 4000 a month easily He said to come back to him with traditional financing.
What are the ways i could make this deal work, was my offer not enticing enough , was the terms too low. What can i offer that he might reconsider.
Thanks for reading this, any help would be appreciated.