Analyzing owner finance terms

[Trina Hanks]

Hey there! I'm new to real estate investing and have come across some properties on Zillow for sale. I'm very interested in investing in this area. In the Zillow add it says:

"Owner financing: 60% of the monthly rental income ($1095 x 0.60= $657) plus 4% annual interest and 5 year balloon. Buyer to pay property taxes and home owners insurance and name the Seller as additional insured."

I know little about owner finance so I'm not sure what is means and if it sounds like a good deal. And help and/or advice would be appreciated! 

Thank you!!

Trina 

[Jesse T.]

Originally posted by @Trina Hanks:

In the Zillow add it says:

"Owner financing: 60% of the monthly rental income ($1095 x 0.60= $657) plus 4% annual interest and 5 year balloon. Buyer to pay property taxes and home owners insurance and name the Seller as additional insured."

 It sounds like they are trying to get the upside of owning a rental property(60% of rent) while sticking the buyer with the downsides - vacancies, property taxes and insurance.

How does their cash price compare to the market?  It looks like essentially they are tacking 40K onto the amount due at the balloon.

This looks like a predatory arrangement where the seller is hoping the "buyer" will give the property back.