Should I personally guarantee a seller financed office building?

[Sam Erickson]

I found a seller that owns a 20,000 sq ft. office building with no mortgage that is interested in carrying the note for me. The building has a gross cash flow of $68,000 as it sits now, with a gross potential of $160,000. The seller is currently running $37,000 in operating expenses. Building needs $10,000 is common area updates and then each vacant unit would need paint, possibly carpet prior to renting. The building at 90% full would have an ARV of $950,000. Below are the terms of my deal:

Purchase price: $550,000.00

Down payment: $10,000

Interest Rate: 3% (Max payment is $2,000 a month)

Term: 5 years

I was able to negotiate that months 1-3 my payment is $0.00/month, Months 4-6 my payment is $1250.00/month, and months 7-60 are $2,000/month.  Giving me time to make updates and get tenants in.  It ultimately makes my down payment $1,750, since I'll be getting $8,250 in mortgage payment savings over the first 6 months that I can use towards improvements.

I don't think I have any issues with the deal as it sits above. The seller has received cash offers but for around $400,000. I know I'm overpaying but with a monthly payment of $2,000 and 3% interest and 5 years I think I'll be able to make up the difference plus and have plenty of equity at the end of the term. 

My issue comes in that the seller had their attorney look over the offer and the attorney is recommending that I give them a personal guarantee.

The plan was to purchase this with an LLC and have it be separate from all my other dealings. I think that the property can work if properly managed but of coarse there is always a risk. The attorney is recommending the guarantee because of the low down payment. Is an effect counter argument that the down payment is small but I'm paying you an extra $150,000 more then anyone else, not to mention the interest you make on the $550,000 for the 5 years?

Or if I think the deal makes sense should I just sign a personal guarantee and be done with it?  Another thought I had was if I sign a personal guarantee that I only guarantee up to $400,000 (what the property is worth today)

Thoughts our appreciated.