Seller Financing vs Bank Financing

[Mark E Orensteen]

Hello,

I'm new to the forum and real estate investing. I have a pretty decent off market deal right now that's currently in probate. It is a condo and the purchase price is $80,000. The ARV is $120,000-$130,000 with rehab costing no more than $15,000. My intention is to keep it as a rental property so my question to you is what will be the better financing option.

With this property I do have a seller financing option. He wants 50% down at an interest rate of 2.87% for 9 years. However I do plan on living in the property temporarily so if I use traditional financing I can get into the property for as little as 3% down ($2400 compared to $40,000) with the current interest rates at around 4.75% for 30 years. I know that for CoC the bank financing option is the better route but I'm wondering if there are other factors I should be considering when deciding which way to go.

What would you do in this situation and why?

Thank you!,

-Mark