Owner Finance Assistance - Pulling equity

[Jonathan Sterling]

Good evening all!

Long post - bear with me please!

Beginner Investor here! A little backstory: I have been a long time paramedic since 18 years old, been doing it for 20 years. I have seen firsthand how safe and affordable housing is needed. I have done co-living all of my life and am now providing the actual property. I closed on a duplex style single family home in June 2025 and within 1 month had the bottum unit rented and I do co-living on the top; owner occupied.  The property pays for itself - this included all fees associated excluding paying myself for property management. 

I have saved another 60k and am looking to expand. I am looking at hard money loans for rehab features and turning into a personal mortgage or dscr for an investment property. I have met a person who has many properties who is looking to offload a few and he wants to do owner-financing. He owns them outright, no liens, no unwarrantable locations. 

On one property we came to verbal terms and want to continue to iron out details, though nothing in writing and non-binding. End unit townhome, 2 bedroom 1.5 baths. Purchase price was 325k, talked him down to 300k. He wanted 5.5% over 5 years with the ability to keep it another 5 if unable to transition to a traditional mortgage or balloon payment. I countered with 10% down, starting first year at 3.5% and raising 0.5% every year for 5 years, ending at 5.5%; no prepayment penalty, able to keep another 5 years if rates do not improve better than his, but at the end of 10 years, it must be either paid off or transitioned to another mortgage.

His broker mentioned also paying the broker fees for both sides to get this deal, equaling 15k. The unit is worth approximately 325k. Turnkey ready to rent, but needs some personal rehab to bring it up to modern specs, no more than 5k. My equity in the property would be approximately 55k, paying the 30k as a down payment and paying the brokerage fees. I want to counter that with paying 45k into the home and him using those funds to pay the broker fees, therefore raising my equity to 70k, again, this is my down payment and what the location is worth vs what will be owed. 

I know a long story, but my question is this: How easy is it to attain a line of credit on the equity to do this again down the road? I could pull the equity and put it in the 1st FHA home, thereby building equity into that and getting rid of PMI, and then making that a generating home that could pay the payment of the line of credit. My research has shown that getting this line of credit may prove difficult since it's not a "traditional" mortgage.

Any help/assistance would be greatly appreciated!

Location: Greeley, CO. The owner-financed property is in Fort Collins, renting for a median $1950. Doing the adjustable mortgage, my cash flow would be around $150-200 a month, after all fees, depending on taxes and insurance. My goal is to build equity over long term rather than short term cash flow, as long as everything pays for itself. 

Thanks in advance!!

Jonathan