Is a 3 year Ballon to short?

[JC Espinoza]

Currently looking at a 4 unit property, with one of the units is unfinished. It’s not in my area but back in my hometown where my dad lives (very handy man) and would be able to finish the unfinished unit. with the 4 units rented it would be a 2% property, I don’t plan on living in one of the units, don’t plan on moving, I live about 4 hours away, I go that way often. The property owner owns it outright. He said he would consider Owner financing, but leaning towards more a cash offer. I have a few questions.

Is a 3 year balloon to short? Should I aim for 5?

Once the balloon is due can I get a loan from the bank on the property to pay the ballon payment to the owner?

Once I buy the property and have all 4 units rented, can I now go to the bank and get a loan to pay back the owner, if so do I have to wait a certain time, such as 6 months? 1year?

Not sure if I can get a conventional loan from the bank since one of the units is unfinished and not rented, He just wants the money to put into his home, says not in a hurry to sell, any advice or possible ways to finance would be much appreciated.

[Jaysen Medhurst]

@JC Espinoza:

1. In your case, no. 3 is fine, since it makes sense to refi into a conventional loan.
2. Yes, you'll need to have 20-25% equity.
3. Yes, you can. Typical seasoning period for a residential property is 6 months.