Potential first deal-Seller finance my underwater home?

[Matthew Hall]

In searching around I ran across this post on another site from a member with an underwater home that he was looking to get out of by offering seller financing:

http://www.reiclub.com/forums/index.php?topic=4812...

My situation is similar, but I don't know how to structure it or if its even possible. Here are the details on the house:

The Good

-Located in Hunterdon County NJ in a desirable town/school district

-2 bed/1 bath

-Attached 1 car garage

-1/4 acre lot-fenced back yard

-Hardwood floors

-Central air, newer oil furnace/wood furnace

-30 year roof put on 7 years ago

-450 SF of finished space in basement, carpeted with built-ins

-Full perimeter foundation drains and two sump pumps (basement has never seen a drop of water)

-New gas stove, dishwasher, and laundry machines

The Bad

-Mortgage balance is about $222K @ 6.125% - House was appraised last month at $220K

-Current PITI is $2345/month

-$1495 Principle and interest

-$615 Property tax (Taxes are very high here)

-$60 Insurance

-$175 Private Mortgage Insurance

-Normal rent for my area on a 2 bed/1 bath is only about $1000 a month

Do I have options here? One thing to remember is that NJ was and continues to be hit very hard by foreclosures and there are presumably a lot of folks with damaged credit who are looking to buy again. The issue is can I offer an attractive enough deal?