Land contract rental purchase?

[Jacqueline Coombs]

Hi, all. I am relatively new to this. Just bought my first rental property a month ago. I now have an opportunity to buy a LC package deal with 2 homes ( 2/1 and 4/2 duplex and 4/2 SF) for 185k, 6% interest with balloon payment due in 2 years. Seller wants 15% down which would take up most of my available capital and the purchase price is in my estimation 10-15k above retail based on comps. Both properties have long-term tenants paying 30% below market rents. The duplex has been added onto a number of times, has messy tenants and needs cosmetic work, Windows and a roof. The SF is a beautiful craftsman and is in turn-key condition with clean tenants. Both are on the west side of Grand Rapids, MI. Duplex 95k and SF 90k. On the plus side, I get 2 properties with a low Down payment. On the negative side, I pay top dollar for both and who knows if I could refinance in 2 years! Being a LC, I can not expect much of a discount and that bugs me because I am hoping to have equity when I refi. Maybe I just make a lower offer on the turn-key 4/2 SF and put down a larger down payment? Any feedback on this? Thank you! Jackie Botham, GR, MI