Deal Structure/Analysis: Seller Financing Option vs Commercial Loan

[Jeremy Dugan]

Good morning BP,

I am working with a potential off-market seller who wants to off-load their converted motel (8-units, 1 is the motel office that can be commercial space) as they retire. I've received their rent roles (4,760/mth) but believe that the market value is about $6,600 to $8,100/month. The Commercial Loan Officer I am working with comes up with a Loan Amount of $336,000 (Total value is $448,000) because of the low rents. I also have their expenses which are in line with my estimates/analysis.

I do not believe the Seller's will like that valuation and I know they are hiring an appraiser. Also, I believe they own this property out-right, no loans, etc.

I'd like to structure a deal where they provide seller's financing with a 2-3 year off-load timeline that gives them a) some cash now via a down payment and b) some regular monthly income all while I work to bring rents to market value and we both benefit on the sale and refi.

How would something like that work and what would it look like? Very much appreciate any advice or recommendations on how to approach this conversation/negotiation.