BRRRR with Seller Financing?

[Melissa Harris]

Has anyone done a BRRRR with seller financing? Was it a success for both sides? What were the pros and cons? I was thinking that this could benefit both parties in ways of, on my end I could save money with not having to pay points or a higher interest rate to a hard money lender and maybe have a lower monthly payment and then for the owner, he could drag out what he pays on capital gains and ultimately pay less in capital gains tax because as it sits right now, he would make around $190k from the sell of the three plex. The three plex needs about $80k in rehab.

Another question I had on top of that was, I have a townhome that I am selling currently and need to do a 1031 exchange. My question is, would the IRS see it as a successful exchange if I put what I make from the townhome towards my down payment to the owner?