Deal or no deal. Input appreciated .

Structuring this as a purchase from your dad to you is going to be the best way to do it. Setting the purchase price at the market value of $1,700,000 with a gift of equity for the down payment of 40% would leave you with a loan amount of $1,020,000. This would not require you to put anything down, your dad will be gifting you the 40% down payment.

That loan amount of $1,020,000 will then pay off the existing loan of +/- $832,000 leaving $188,000 in funds for closing costs and ultimately the end result of at least $150,000 in cash proceeds for your dad which is what I think he was looking for in the end or you guys were going to use for upgrades/repairs to the units, that part I am unclear on but either way you would have at least that as a net in the end.

The payment breakdown would look like this:

$6280.32 monthly principal & interest based on a rate of 6.25%. Up a tick from yesterday and slowing creeping back up

$1770.83 estimated property taxes

$200.00 estimated home insurance

$8251.15 total monthly payment

Current rents on the three back units total $5445 so worst case you would be left with $2806.15 to bridge the gap on the total payment less current rents. I know your plan is to get possibly new tenants in there and likely at market rents, all the payment could be covered by your new rents on those other 3 units.