Owner Financing Deal

[Brandon Kegarise]

Good evening. Been a member of BP since about 2018, BUT never posted. Brief background, currently have 2 SFH rentals that cashflow (270 & 370 per month). Slightly under-performing in my opinion, but have have plans to increase these #'s this year (July 2019). In Nov 2019 my wife and I decided to take on a 3rd SFH with significant renovations. The deal is as follows:

3:2 Slab home

Purchase Price 35K

-Owners agreed to owner finance 30k of the deal @ 5% interest, amortized over 10yrs, and a balloon payment due at 36months for 22k.  

Currently sitting at about 42k in renovation cost with another 5-7k to complete and have the property move in ready by mid March. Based on comps in the area, I am projecting an ARV of at least 105k. All renovations have been cashflowed thus far.

I would like to hold the property as a long term rental.  Rent for this property will land around 1125, with a monthly expense of around 550 @ current financing.  What would be my options to get my capital back out of this deal?  Would a 1031 apply (I do not intend to sale)? Could this property be financed into a traditional mortgage and pull my money out(even this route, the property would still cash flow positive)

Any thoughts would be greatly appreciated.  Thanks