Duplex with owner financing (getting my brain wrapped around it).

[Casey Greeno]

The Back Story:

So my coworker has a couple duplexes that he has had for maybe 15 years and is looking to get rid of.  At the current price they dont cash flow very well at all.  1300 gross rent per month and he's looking for around 120k for each.  I suspect he overpaid when he started and has done a lot of the work on the place himself to keep some cash flow going but that is not how I want to set up my first few investments.  

I m pretty sure he's not going to budge on his price bc he keeps telling me what they appraise for and I get it but I'll just move on to another deal that works better for my needs.

I did start to think, what about owner financing?  Maybe this could be a win, win situation for both of us.  Say he wants 120,000 but I ask him to carry the note and in return I offer him something like 130,000 with 10% down.  Make it a 15 year loan and pay him the 650 a month mortgage for the 180 months.  He makes an extra 10,000 than he wanted and I Cashflow much better while saving huge in bank interest and only needing 10% down.

Does this make sense even though I would be paying 130k for a house that I wouldnt look unless it was 90k?

Thanks for any and all input

Casey