Structuring my first deal!

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I have a house across the street from my parents house that is now vacant with the owner too sick to live there anymore. I want to approach them to potentially make an offer, but I don't even know if they want to sell it yet. Since the owner has lived there for 37 years and will need full-time care, I am considering suggesting a seller-financing deal to give them monthly payments instead of just offering a low ball price. Thoughts on how I might approach them about it? Am I correct in thinking that they would offset any capital gains tax this way? I know I am still green in all of this. So if anyone has some suggestions or suggested resources that I can read myself, I would greatly appreciate it!

Yes you are correct. The owner would only be responsible for taxes on the downpayment and payments received for the year. One thing to keep in mind though, is that the seller must have lived in the house for 2 out of the last 5 years. 

There are a few ways you could approach this situation. Knocking on the door and talking with the owner / decision maker would be your best bet. Explain your situation. Tell them you are looking to invest in a home, that your parents live across the street and ask if they have any interest in selling. Find out their needs, and then see if your desires can align with their needs. Maybe a discounted buy it now works best for them, or maybe its seller financing. Either way, we're just speculating until you talk with them. Have a game plan in place for both situations. Have a price you would be willing to buy it for (run your comps, estimate repairs etc..) and if they want to take installment payments, have your terms that would work for you. For a "good deal", you should either get your terms or your price (of course not paying over FMV).

You said they lived there, it's their primary residence, they won't have any gains unless the gain is above the current $250,000 I believe it is still. 

Seller financing they will have interest income, same as regular income. 

You mentioned care, if medicare/medicade is in the picture you better get to an attorney as that note can disqualify them from receiving benefits. Give them advice on financing and cut your throat when you don't know the ramifications of what you advise. Stay away from seller finance advisers on the internet, what you present has liability attached!

I've addressed this issue before, might search my posts under seller financing and notes. Good luck :)