Interest only seller financing

[Marco Morkous]

I think we all know benefits of interest only financing as being lower payments higher cash flow. A seller has offered interest only financing for 5 years on a multifamily property.

Here’s a concern I have. With unsureness of the market and lack of equity due to not paying down the loan. What are the major risks and how would I reduce them?

[Marco Morkous]

@Jason Hirko

Thanks for the insight. The deal has incredible cash flow either way. But the seller is negotiable on a smaller down payment which I why I see I’m considering it. With a bank I’d be looking 20% down, with the seller it’s more like 5-10% down.