Seller Finance 20 year or 30 year Mortgage for Duplex

[Dan Millan]

Hello BP,

Looking for advice on an opportunity to buy a duplex with seller finance. Here's the details, the seller is willing to offer the following. Duplex purchase price: $400k, down payment: $40k, Interest rate 3% and seller is willing to carry for 20 years. Running these numbers, the mortgage including interest, principle, taxes and insurance would be $2596/mo. Current market rental rate for the area is $1,800 per unit so let’s use $3,600 for the gross monthly income. The seller has agreed to those terms but I’m wondering if i should see if they would accept a 30 year instead, which would change the mortgage to $2,117/Mo and increase the monthly cashflow. With these numbers in mind, I’m trying to look ahead in 10 years. I ask myself, would I want to go the 30 year route with higher cash flow with the intent to refi in 10 years(assuming the seller would allow me to refi out of the deal after 10yrs), pull equity and continue to scale. Or take the 20 year to keep the property for the long-run since the interest rate is very low? 

What are your thoughts?