Help with creative seller finance terms

[Erin Stewart]

I sent out a mailer to all of the condemned and vacant properties in my city. I got a call back from an older mom and pop landlord who was considering selling one of their two unit properties. I met the sellers and toured the property today. One of the units is vacant and needs about 30K in repairs. I would like to invest 50K total in repairs for the whole property to make it really nice to attract quality tenants.

I'm used to making as-is cash offers with my HELOC and then refinancing into a 30yr fixed mortgage with my local bank. I have done this type of brrr deal with with two other rentals and have a 3rd rehab in progress. The seller does not have a mortgage on this property and it sounded like they were open to entertaining some type of seller financing offer.

1. I will make them an as-is cash offer 

2. I would like to make them a second offer with a higher purchase price than my cash offer. With some type of seller financing. I'm stuck on how to structure this and I don't want the 50K of repairs tied up in my HELOC for too long.

3. I'm picturing that in my second offer the owners would finance the property for one year while I complete the rehab and put new tenants in place. I would then get my standard reappraisal and bank mortgage.

4. It sounds like the sellers do not need to money right away. The one unit had been vacant for two years. It sounds like they want enough money in 5-6 year to move into a retirement home. They have 4 other rental properties that I would be interested in purchasing at some point.

5. Any creative suggestions on how to proceed? Thanks!