Seller Financing (Pros and Cons)

[Maxim Kats]

Hey everyone,
Fairly new to real estate investing, but recently stumbled on what I perceive as a good deal. Multi Family Property and when inquiring on financing options, seller financing was offered as a possible option on the property. Numbers wise, seller financing would cut closing costs and be negotiated for a better plan that suits me and the seller, including interest rate. What are some pros and cons of taking this approach or anything that I should look out for? Was told rehab would just be a touch up and place is very livable by Agent. Full inspection will be conducted by 2 separate third party inspectors.
Property Details are as follows:
Sale Price: 45,000
Cap Rate: 17%
Down Payment: 25%
Cash on Cash Return: 20%
3 Family property
Cash Flow: $307

[Paul Shannon]

Agree with @Jeff Copeland.  Term will usually be amortized between 20-30 years with a balloon payment due on year 5,7, or 10.  However, the flexility allows you to negotiate anything.  Expect a higher interest rate and potentially a higher purchase price than if you were using a traditional lender or paying cash. 

One watch-out is the balloon payment.  Make sure you will be able to refinance into a more traditional loan if you don't intend to have cash to pay-off the remaining loan balance.  Investment properties under $45,000 are financeable, but there are less lenders willing to play in that space.