Use arbitration deal or close directly?

[Taylor Cameron]

Hello everyone. Looking for some opinions on what to do with this deal. I will most likely be occupying one of the units at least for a little while. My main goal is to house hack and make my monthly expenses as low as possible. My question with this deal is should I close asap or not?

Details

Arbitration deal w/option to close whenever within 6 years at the pre-agreed purchase price. The monthly payment to the seller would be $1,200 while the total rents are $1,700. Gives me a "cash flow" of $500. However, if I lived in the units, the total rental income would equal $850 leaving me with a monthly payment of $350. None of my monthly payments to the seller would go toward equity or a down payment.

OR

Close directly with a low down payment (5%) making my total monthly expenses (PITI) $1,300. Bringing my out-of-pocket expenses to $450/month. I am not opposed to the arbitration option but would prefer the deal to be structured more like a rent-to-own where I would build some equity.

Any thoughts are appreciated!