Help with negotiating terms with Seller financing

[Ben Kirchner]

I believe I understand the basics of seller financing, and the pros/cons for the seller and buyer. However, I would like a little help breaking it down. Given the 1% rule, I would figure most houses where the owner has had the property for a long time, it would have appreciated significantly where you would not be able to get 1% rent of the purchase price in this case. Therefore, are buyers forfeiting the 1% rule in turn of reaching other favorable terms that allow them to cash flow? Let's walk through this example:

- Seller assumes value of home is $200,000

- Current rent is $1400/mo

- Seller intends on reinvesting money from sale of the house into conservative stocks, but wishes to avoid the big 1-time hit of capital gains tax.

Given the above, what might be favorable terms for both the seller and the buyer?  Are there win/win terms available?  I should note that the house is in an area that will appreciate nicely, but buyer's main objective currently is cash flow.