Seller Financing for First Deal(s)

[Rick Sheldon]

Hi everyone,

I have been wanting to get into the market for a year, or so, but with multiple job changes and relocations, I have kept putting it off. I now live in Maryland, but I have a great opportunity to get into the midwest market, in the town I'm from.

I recently put an offer on a house then found out the seller is the father of my childhood best friend. That house was sold to another buyer with a full price cash offer, but I have been speaking with them directly since then, and they have about 40-50 units they are trying to divest because they own and operate a growing business and want to focus on that. 

They are open to seller financing, but they mentioned "20% down." I put together this PPT, hoping to explain why we would both benefit from less money down. Please let me know if my terms seem appropriate and if so, is this a good way to begin my business and scale quickly?

The way I imagine this working would be to use 0-10% down to purchase a house with seller financing. They would already have a tenant in place from day 1 and after 5 years, I would refinance and use the cash pulled out for the balloon payment on each house. By doing this, I could buy many more houses, but my concern would be that I would be very highly leveraged. However, as you can tell from the PPT, the home prices are very modest, and I have a pretty high income, so I could weather some rough times if needed.

Any advice or encouragement is appreciated.