Bank financing of sale contracts

[James W.]

I was wondering if anyone has experience selling a home on a contract and getting financing from a bank on the sale contract to get money back out of it?

For example, I currently own a rental property free and clear that is worth around $200k.  If I sold it to a buyer for $200k with $15% down, I would have a contract for $170k on the property.  Does anyone have experience going to a lender to get a loan on the contract?  I couldn't specifically find it when searching.

If so, what would lenders generally have for terms on a contract loan (LTV, rate, amort...)?

I do not have experience with this, but I'm assuming a lender would probably only consider lending around 75% ($127,500) of the contract price.  I  could probably make some money on the interest rate as well.  If I were to get 7.5% on the contract and get a rate of 5.5% or so on my loan, their $170k loan at 7.5% would be substantially more than the loan I would carry if I were to get a loan at 5% for the lesser dollar amount.  In this example, the payment to me on the contract would be $1,188 and my payment would be around $724 assuming both would have a 30 year amortization.  There would be incentive for the buyer to refinance if they are able to, but that wouldn't necessarily be the end of the world either. 

I've kicked around the idea on a rent to own before but have always just sided with renting from the standpoint that loan payments are generally cheaper than what I would get for rent in the area.  I have always figured it is better to own the home than collect the payments as interest as opposed to sell it on a contract and collect lower payments for someone else to own.