Help Me Structure This Deal

[Michael Landrum]

Hi, I am in the middle of negotiations with a pretty motivated seller who is looking to sell me her duplex, but can’t seem to figure out the best win-win scenario for this one. 

The situation: The seller is pretty motivated because she doesn’t want to manage this property. She used to live in the duplex but has now moved into a 55+ mobile home park where she wants to live happily ever after, and with no debt. I am a pretty motivated buyer because I’m starting out in real estate, looking for buy and hold small multis! I have one duplex already and am currently in the middle of a flip that I’m using to build up some more cash.

The duplex being sold here includes 2 large 3-bedroom units that are functionally in good shape, but cosmetically outdated. The only serious problem with the property is gutters and siding that will both need replaced. (Lack of attention to the gutters led to damaged siding) One last thing about this deal, the current mortgage on this property IS assignable, has no due on sale clause and the seller has told me that she is more than willing to carry the note, so long as it’s not more than, say, 10 yrs. Now, speaking of the seller, we all know we’re in the business of solving problems and so let me explain this sellers “problem”...(I asked her what she is hoping for out if this deal and this is what she said)

She is looking for: $130,000 because she wants to pay off her current mortgage on the duplex (just under $100,000) and a personal loan that she took out in order to buy her new mobile home that she’s currently living in (about $25,000) as well as roll her portion of closing costs into that $130,000. 

I’m looking for: 

Walking into this property for no money (because my funds are tied up in the flip right now) and making sure that income from the duplex, AT LEAST covers the mortgage and $250 per month for reserves. I’m willing to, initially, receive no cash flow if I’m into this thing for no money.

Here’s the numbers and my current proposition for her, and where I need your input: Currently, the property brings in $1550. The sellers combined monthly payment (duplex +personal loan) is $1300 and so if she carries the note, my payments need to be at least $1300 because remember, her whole point in selling is to not have to worry about her debt. Now that would leave me with $250 for my reserve-savings.(which is what I want). Current proposition: I want to offer her $130,000..$0 down, 0% interest, amort. over 8 yrs. (I know 0 down and 0 interest sounds outrageous, but beyond that please consider my specific question that follows) my specific question is this: if I pay my mortgage with her off faster than she pays her loans off, how would I go about helping her payoff the rest of her loan amounts. I would be saving the interest upfront, for the first 8 yrs, and then refinance for the amount she still owes or something? Or am I just going to need to restructure the deal so that my payments to her are amortized in such a way that we are both paying down things at the same rate? Idk, honestly I i feel like im tying myself in mental knots and I have a feeling I a overthinking thing overthinking because thawed in reach im reaching out here. Hopefully some one can be straighten me out! :)