Owner financing with limited equity

[Alain Mario Eboli Jr.]

Hello all! Relatively new to real estate investing. I am trying to be creative on an offer (my 2nd deal) for a By Owner home where the owners have limited equity and have the house priced on the high end of what it's worth. It's been on the market for about 45 days and i think they are motivated. I have found out that they are selling to upgrade and need their down payment in cash for a new bigger and better place. I know the home was purchased 2yrs ago for 82K, they have it listed at 86K and the price that works for me is around 74K... I assume they have low equity in the house and i am wondering if owner financing is feasible if my offer comes in at less than their equity in the home? 

The win for them would be a high cash down payment for them to purchase their new home, but i assume they would end up still with a small payment covering the difference on their current home which might affect their ability to get a new mortgage. Any advice here? Or do i have the concept of owner financing all wrong??

Thanks in advance for the advice!