Seller Financing can Offset Depreciation Recapture???

[Neil Robertson]

So I'm drawing up a Seller Financing offer (I am the buyer) and I'm thinking that seller financing benefits the buyer tremendously when having to pay Depreciation Recapture. The money the buyer makes off of the interest by carrying the note for lets say 5 years will be more than what he has to pay in depreciation recapture (and yes I am aware the have to pay taxes on the interest income)

For Example:

Buyer purchased property for 650,000. Depreciation  claimed is 23,636 per year (650,000 % 27.5) 

So if the buyer holds the property for 7 years he has to pay 41,363 in depreciation recapture ( 23,636 X 7 years = 165,452.00......165,452.00 X 25% recapture rate= 41,363.00 in taxes) 

So if purchase the property for 650,000 (lets say this is his asking price) and offer him a 50,000 down payment w/ 30 year amortization and 5 year balloon @ 4% the buyer would make 114,555 in interest over the 5 years of him carrying the note!!!

This make it VERY worthwhile to the seller to carry the note. He gets what he's asking for the property, he still gets a check every month, he makes money off the deal and basically escapes depreciation recapture. 

Am I looking at all this correctly? Am I missing something? This seems like a great deal for the buyer....

What are your thoughts? Am I calculating this correctly?