Owner Financing vs. Hard Money Lending

[Connor Martin]

Hello fellow BPers, 

I have a couple of questions in regard to purchasing a property. I have been doing some ground work in neighborhoods around my town. I struck up conversation with an older couple sitting on their front porch (neighbors to a house that was on the market). They told me that they own the house that they are living in, and also own an adjacent multi-family. They said that they are interested in selling the multi-family soon but it "needs a lot of work". I told him that I may be interested in buying, gave him my business card and left it at that. The multi-family is a two unit up/ down duplex, in a great neighborhood, that would be an ideal first investment for me, and I would also plan on house-hacking it. 

After doing some due-diligence on the property, I found through property records that they inherited the property a few years back after their father passed away, and the father had the property paid off since 2002. I figured it could be a good opportunity for an owner-finance deal, however I'm tentative to proposing owner-financing without scaring them away. Also, I'm not sure how to go about funding the rehab costs if I were purchase via owner-financing. I'm also considering using a hard-money lender that I know, who will cover 90% of the purchase price and 100% of the rehab, this might be my stronger option.

Anyway, just looking for some advice on how some of you guys would approach this situation. Thank You!