New multifamily investor advice

[Collin Perri]

Hello, just looking for advice, I just received verbal acceptance on a seller finance deal for a Mirror sided duplex three bed two bath for purchase price of

640 K

Six year balloon

$62,800 down

$1300 a month

0% interest

I feel like this is a solid deal ever would like some feedback from multifamily investors I've done creative finance like this in the past.

Thanks in advance

[Stuart Udis]

@Collin Perri  Overpaying to achieve better terms is not recommended. If a property has been on the market for four months and has not sold at $600,000, that is a strong signal the market does not support that value. The rent roll already suggests that $600,000 is a stretch. 

You suggest the property will be worth $600,000 in six years, but what if it doesn’t appreciate as expected? In that scenario, you’re left with an inflated basis, limited exit options, and a balloon obligation that becomes increasingly difficult to refinance or retire. 

Curious to hear how you came up with this strategy and offer terms?