Am I dumb for passing this up?

[Nathan Richmond]

Ok, so here it is in a nut shell. I currently own 2 SFR that I am renting out. I only rented the 2nd one out 5 months ago. So I am renting myself until I can show the rent as income and therefore get the mortgage on my second house taken off my debt to income ratio. That's my current situation, but here's my question. Another teacher that I teach with is getting ready to retire and move to Texas. His house is paid off and he is trying to sell it. It is in a very low income area of town. The house is 99 years old. It is 2,600 sq. ft. with a pool. He has had his house listed for months with no takers. He's dropped the price from $220,000 to $149,000. So I asked if he'd be willing to carry an interest only loan. He said he would for me. We've basically agreed to a 4.25% interest only loan for 5 years. This makes the payment right at $500. Sounds great, right? Here's the issue. Three years ago he got solar. He signed a 20 year lease that I would have to take over. The payments are $172 a month now, but rise every year and by the 20th year they around $320. So I would somehow have to work that into the lease. Also, with this not being a very good area at all, I would only be able to rent the house for around $1,000, maybe $1,200 since the electricity bill will basically be zero. Obviously getting an owner to finance a property is an awesome opportunity, but what about in 5 years when the loan is done? This area does not appreciate. I doubt I will be able to refinance into a conventuals loan without having to put down 20% (I don't have $30k) My other concern is that I really would like to get a 4-plex with FHA financing. I would live in one unit and rent out the other three. I believe buying this house will prevent me from qualifying for a loan and I'll have to wait till I can get the house rented for 6 months or a year before I'll be able to purchase a 4-plex with much better cash flow. Sorry, I know this is long. So am I dumb for passing this up? People with an ability to spend a $1,000 a month on rent in this town choose much better areas than this one. Oh, and since he and I already have realtors, he's wanting to do this transaction with me covering the realtors fees. So I would have to put roughly 9,000 down. A loan officer is already telling me they will have a hard time seeing me as anything but an investor and might not even finance me with an FHA loan, not believing I will actually live in the 4-plex. Ok, I'm done. What do you guys think? Would love advice from more experienced people than myself. I know owner financing is very rare.