Advice on strucuring owner financing deal

[Alexis Zion]

Hi!  I'd really appreciate any and all advice on this topic.

I have found a property I'm interested in. It is an MLS listing that has been on the market for over 300 days. The seller owns it outright. After making several offers, the seller said he will only go to $155,000 (from $167,000 asking price). I think the value is closer to $130,000. There are two realtors involved (his and mine).

Our previous offers were using conventional financing with 20% down.   For my final offer, I'm considering asking for owner financing to allow me to meet my cash flow goals while not putting as much of my own money into the down payment.   I'm willing to give him the price he wants for the terms I want.

I'm thinking of a $15,000 (10%) down payment and 2 years of principal only payments followed by 3 years of principal and interest at 4-5%.  After 5 years I would refi through a commercial lender and pay the seller out in full.  This would be my first owner financing attempt.

A few questions:

How likely is it that he will accept 2 year of principal only payments?

How would you structure an owner financing offer?

Any suggestions about communicating through the agents to the owner? 

[Antonio Esquivel]

That all depends on the seller...

I would also do a balloon payment. The terms and conditions would vary from property to property but in general I think its a great idea to take full possession of the property within 5 years as you stated.

Just tell your agent what you would like to do.