Need help on evaluating owner finance deal?
Lot's of info so I'll try to keep this succinct. I haven't done any owner-finance deals before, need some help on evaluating this one.
Lead house will easily rent for 900/month. ARV is hard to pinpoint but I think safe ARV will be 75K. House inside is in great condition, it was a foreclosure but over the last few years nicely rehabbed to the neighborhood standards. Outside needs some exterior scraping, painting, and two new windows, but certainly no more than $3000. I'm assuming $5K for repairs overall.
Seller contacted me in response to a letter targeting properties which owe taxes. Property taxes for this house are about $1900 a year. This house is 3 years behind, so with interest penalties could possibly owe $7K. She hasn't mentioned this and I'm not going to say anything unless it helps me, or it's time to go to closing. She says she owns it free and clear, and I think this is probably true as it was purchased for 35K in 2014. She tells me she's selling because she needs money to get her child back in school, but also because she's moving out of state...probably more to it but I think she can be defined as "motivated".
In conversation she said she'd be willing to owner finance the balance if she can get at least 35K ("or maybe a little less") to get her child back in school, move, etc. I can swing that.
What's the best way to metric this deal and evaluate it? Overall IRR over the period of the owner financing?
I'm going to come up with a straight cash offer with the intention of BRRR'ing (probably around 50K - she pays taxes at closing), and an owner finance offer of maybe 60K, with 30-35K down and the rest at 500/month for about 60 months, and she pays taxes at closing out of the down payment.