Hi BP Community! 

Me and my husband are newbie investors with zero properties in our portfolio, however we've identified (8) properties we would like to acquire in the next (6) months. One of these properties is a FSBO that we've been eyeing for a few weeks and we finally made an offer yesterday! Our first offer ever! It felt so good to get it over with! So here's some details...

SFR

3 Bed, 1 bath

1277 sq ft

Built in 1956, but upgraded recently with new HVAC installed and new roof as of last week 

Located on a very quite street. There are (12) houses on the street and I know for a fact (4) are rentals. One of which is another house we are trying to purchase, three doors down from the property I'm discussing here. 

The owner is a contractor, bought the house back in 2008 as a flip, ended up converting to a buy and hold and has had the same renter for (8) years, they recently relocated to a different state due to a job so the seller decided to finally sell. The rent was $800/month and the owner paid the trash. We believe that rent is below market value for our area so we are looking to rent the property for $950/month. 

So, we want to pursue seller financing and I thought this would be the deal that it could really work on because it is a current investment property so that made our argument stronger. After talking with the seller we found out there is a mortgage on the property which isn't as ideal as a free and clear house but we told him we could take the house "subject to" the existing financing and then his profit he would've received on the deal he can do seller financing and we could work out the terms. My main arguments for this are:

Since this was an investment property and not a primary residence, profits from the sale are going to be subject to capital gains tax. So, if he does seller financing he can receive his equity over time and shelter it from capital gains, and additionally he could receive more interest on the profits than he would depositing it into a savings account.  

All of our interactions have been through email, and we've gone back and forth on price and he's kind of ignored the seller financing and I think it's because he wasn't understanding what we were implying and so finally in the last interaction we spelled it out and said we'd be happy to meet with him and discuss and he has agreed.

So here's where I need you BP! What do you think? Are my arguments solid? Is there anything I'm missing and should drive home in our efforts to secure our first REI??? I really want to get this right, it might be our only shot!! Let me know if you need more information, I'd be happy to provide it :)

Thanks in advance!