Seller financing terms
Hi all. I've never been involved in this sort of transaction and wanted to get the communities input.
I am negotiating the purchase of a portfolio of 3 SFR Units in Cleveland, ohio. The seller has agreed to an upfront cash payment of 1/3 of the portfolio value with the balance being seller financed. Worth noting, the 1/3 down payment is being provided to me by a private lender, which I will need to repay within 6-9 months.
A few questions:
1. What terms should I attempt to secure under seller financing? I was thinking 5 year maturity, 30 year amortization at 4%. Ballon payment at maturity. What protections should I include, if any?
2. What is my best avenue to repay both my private lender and ultimately the seller? 3 separate mortgages from a portfolio lender at 75% LTV?
I am targeting to buy the properties at 70% of appraised value.
Much appreciated!