Duplex Purchase Deal Thoughts

[Ryan Bakerian]

Hi all, I'm looking at a duplex a very good client has offered me. I own another multi unit on this street as well. It's in a B class neighborhood with major pharma growth. It's completely renovated top to bottom and has roughly $200K in the renovation. It's a 4 bedroom, 2 bath duplex. (2 bedrooms per unit). Upstairs gets $1300 a month and downstairs is vacant. I'm guessing around $1600 in this neighborhood easily. Off street parking, quiet dead end street. Building retail is around $335,000 - $350,000 on market currently. I proposed a couple owner financed terms to them and they returned with this one:

Sale Price: $300,000 

$25,000 Down. 

3% interest. 5 year balloon. ($244K ish) 

This is obviously far better than any bank can give me with interests rates around 7.5% here non owner occupied. Closing costs be way higher on a non owner financed deal. I can make roughly $900-$1K a month with these numbers fully occupied. Property would be worth around $375,000 at term end. I could refi out to a tradition bank and keep it as a hold. 

Thoughts?