[Calc Review] Help me analyze this deal

[Jarreau Jackson]

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Hello BP Fam! -- How often are sellers entertaining owner-financed deals in your market?

I'm looking to place my first owner-financed deal/offer and was looking for some input/feedback (I have not yet contacted owner):

1. Deal Structure for this vacant, free & clear SFR (I desire $250/mo. free cash flow):
> Asking: $130k (2bd/1ba)
> Estimated value: $105k
> Estimated repairs: $0
> Down Payment (3 mos. rents): $3,300
> Seller Financed loan amount: $126,700 @ 2% interest, over 25 years
-----> I am considering balloon payment in 5 years, if need be, of $106,692.78 (Cumulative Principal: $126,700; Cumulative Interest: $11,676.96)

2. Viability for owner financing in Florence, SC in 2022 (yes even here in a small town the market is stable and healthy!) --- 3.95% house value appreciation, YOY over the last 20 years for this census block.

3. Red flags and blind spots when approaching sellers when you as the buyer are only interested in owner-financing a property (I'm focusing a majority of my capital in other ventures).

The goal is to maximize free cash flow, close on a win-win deal, and hold this property as a LTR for > 10 yrs.

Am I approaching this realistically? I welcome any and all feedback (I have tough skin ;).

Thank you!

*This link comes directly from our calculators, based on information input by the member who posted.

[Tim Herman]

@Jarreau Jackson There was an extra 3. It should have been 33 1/3 months. 3/100=1/33 1/3. Your 4% vacancy is now a turnover every 25 months. Now if it takes you 3 months to evict your next tenant will only have to stay 75 months to get back to 4%. Most banks use 5% vacancy. My turnovers rarely last more than 1 month.

You have a new capex of $77. Small picture so I am just guessing the size. Let's say there is new floors. Go to your favorite flooring store and ask for the commercial warranty. Most will be 10 years or less. That is your lifespan. My area it is $6 sf to replace. Assume 1500 sf of flooring. 1500sf*$6 sf=$9000/120 months life span=$75 for 1 item in a capex budget. Do you think $2 per month will cover the rest of the items I listed in a capex budget.