Floating Rate for Commercial Deal Advice

[Dolev Shemesh]

Hello, 

I have this good opportunity buying a complex. Seller offer private financing for 10 years @ 5% interest rate. Cap rate is 10% @ $2.2m ($400k DP) and I'm calculating approx. 33% annual profit at these rates. All units in the complex are currently rented and under contract for the next 3-4 years. The area have potential as it's a growing area. Seller will sell as an S. Corp to avoid high taxes on the property. 

Seller could extend financing after 10 years but I'm not counting on that. My concern is adjustable rates after the 10 years, but the rates above are just too tempting. 

What should I do? 

Thank you.