So here's the details, property just appraised for 235k. Seller wants to sell off market and is willing to finance it for me. He does have a 115,500 loan on it at 5.5% interest rate, PITI of $905.94 and a maturity date of 11/1/2043. The property is a duplex with one tenant paying $725 and on a lease till 11/15/2021. Other tenant is paying $750 and lease is till 8/31/2021. owner also pays water/trash/sewer which averages about $105/month.

The property is in great shape and needs no repairs. Owner is current on his loan. He didn't give me much guidance on the terms he is looking for, just told me to send him an offer. He is an older man, probably in his 60s and I think he just doesn't want to deal with tenants or maintaining the property.

Here is what I offered him:

Purchase price: $215,000

Existing loan amount: $115,000

Mortgage payment: $905.94 @ 5.5% Interest, 23 years remaining on loan

Buyer down-payment: $15,500

Seller financed amount: $84,000/15 year loan

Interest: 0% for the first year, then 3% interest for the remainder of the loan. (With option to pay off sooner without penalty)


Payment for the first year to the seller: $466.67

Payment to lender: $905.94

Water/trash/sewer: $105 (Estimated)

Total expense: $1477.61 Rent from tenants: $1475.00

Buyers cash flow: -2.61 (Not including maintenance, vacancy, etc.)


Payment for the remainder of the loan to the seller: $572.08

Payment to lender: $905.94

Water/trash/sewer: $105 (Estimated)

Total expense: $1,583.02 Rent from tenants: TBD

Buyer cash flow: TBD

I think I can raise the rents to $1000 each side. I realize this deal isn't the greatest out there but it could be low money down and I left my w-2 job so him financing the deal is a big benefit for me right now. I wont make any $ the first year but will cash flow well soon as I can raise the below market value rents. 

Looking for advice on how to structure the seller finance terms. Any help would be appreciated..