Owner financing question
I am looking at purchasing a duplex for 100k. The seller is an older man and wants to do owner financing so that it will continue to give him income from the property and he will make a profit from it. However, the seller wants to charge a 6% interest rate which is very high for today's market. I am curious to know if anyone has experience with the way he wants to loan the money.
He wants to charge 6% per year on the amount that is owed that year. So lets say the first year I will pay interest on 100k. The following year lets say the loan is reduced to 90k, I will only pay interest on 90k.
Has anyone heard of this type of loan? I am new to investing and this will be my first property if I purchase it. Thanks for any help.