Working on my first deal and got a roadblock before offer was written.

The unit is an 8 plex owned by a woman with nothing owed on it.  This has been for sale for a little over a year.

Asking $199,900

I asked the broker if she would do seller financing, since she doesn’t owe anything on this and she was open to that.

A little detail- Cap rate=12% DSCR=1.9 COC (based on my offered down payment)= 109%

I offered full price with $5,000 down, 4.5% with a 20 year amortization and a balloon in 5 years.

She came back with $25,000 down and a 2 year balloon.

I countered with $12,000 down and a 3 year balloon.She (and her grandson) wanted to settle on a 7% 3year, but they wanted to stick with the 25K down.

I don't have 25K at the moment, so I was wanting to stick with 12K

The broker mentioned that she would need the 25K because her closing cost would be around $15K.

I told him I didn't think we would have closing if she is financing and was told that we would go through the normal closing at the title co. and she would need the closing.

So, I am confused.  I contacted a broker that I have been working with and he said that sounds absurd. Unless she has a note (I asked and there is none) or unless they were wanting her to pay a fee up front.

This would have been my first commercial deal, but I’m thinking I’ll need to walk away.    Maybe check back in a few months….Any thoughts?

This negotiating is exciting, none the less.