BiggerPockets, I need help drafting an Owner Financing Proposal...never done it before.

Details:  I have the opportunity to purchase 3 Condos in a nice complex for $105,000 total from the same owner.  They agreed to owner financing along with a credit check; they want to know my terms?

My questions to you:

1. Recommended down payment? Should it be a percentage?  

2. What is the going interest rate (understand it is negotiable but is it usually above conventional rate or below?)

3. Average loan term for owner financing?

4. What else should I be thinking about?

Is this offer too off?

1. $10,500 down payment (10%)  

2. 5% interest rate 

3. 20 year amortization schedule with option to pay it off sooner

That NETs me $364/month in positive cash flow which I'm good with (ROI = 44%)

Thanks in advance for any assistance or deals that you've done.  Was thinking, should I submit two offers; higher asking price with lower interest vs lower asking price with higher interest?

Thanks

Chris

Sounds like a good offer to me! All of the numbers you chose are fair and reasonable to both parties.

So here are my two offers that I ginned up...almost seems too similar, whatcha think?

Offer #1

Purchase Price: $90,000

Down Payment: $10,000 (11%)

Loan Amount: $80,000

Annual Interest Rate: 4%

Amortization Period: 360 months (30 years)

Number of Payments: 120 (Balloon payment at 10 years)

Monthly Payment: $381.93

Balloon Payment: $63,409.40

*No prepayment penalties

Offer #2

Purchase Price: $99,000

Down Payment: $5,000 (5%)

Loan Amount: $94,000

Annual Interest Rate: 4.5%

Amortization Period: 360 months (30 years)

Number of Payments: 144 (Balloon payment at 12 years)

Monthly Payment: $476.28

Balloon Payment: $70,899.50

*No prepayment penalties