Capital Gains for owner financed property

[Simon S Marthinsen]

I’m talking to a seller about purchasing his 26 unit 1/1 building. Sales prices is between1.8-2 million. The property is off market but he is interested in selling. His worry is capital gains. He as owned the property since 2000.

If he sold it to me with owner financing, when is his capital gains due?

At the sale or over time? He is aware of 1031 but has no leads on another property.

I’m open to any ideas on how to structure the deal.

Needs $400k reno

26 units

Market rent is $950 before reno. Could probably get $1050 if renovated.

It’s in an excellent neighborhood with strong potential for appreciation.

I have considered FHA 223(f) financing and making it a government subsidized building for seniors. Advantage with this is the super low down payment.