5 Plex with a reasonalble seller

[Brett Hearn]

Hi all,

I'm new to the site and new to the process, but jumping in!  I've been putting in the time in the books and on this site so I have a general question for all.  I live in the bay area but have an opportunity in my hometown.  It is a 5 unit complex listed as residential.  I know the owner personally, as I grew up around him since my best friend is his uncle.  The property is listed for $315000 and each unit makes $550 a month totaling $2750 a month.  I do not have the cash for a down payment of $97000, so I was thinking of going with the Master Lease Option.  Yet, I'm not sure what to offer him.  I know that he is motivated as he just purchased ranch property and needs to offload some equity for capital gains purposes, not because he needs cash.  I've been racking my brain because when I compute all the numbers I could be getting $450 cash flow and that's including property management.  

I have spoke with him on the phone and he was open to ideas.  How would the whole MLO work if I were to lease the property, keep the current tenants, then refinance and pay him off?  I really just don't get the idea of him carrying the note and then me refinancing.  Any help would be wonderful.  thanks everyone for your time, and this is a lot of fun!