Looking stupid negotiating a seller financing option

[Rodney Sums]

I'm under contract for a property with a seller that may entertain carrying (all not part)

This would be my first attempt at this type of deal.  I'd like to make an offer that makes sense and is beneficial for all parties as to make it go through but not look stupid in the process with a bad offer or getting an offer accepted that's bad for me.

General description:

1967 Duplex, Brick, crawl space, half acre, detached garage, 2100sq ft. 10 year old roofs, One unit renovated on the interior, other side original. Tenants in place leased for one and two years.

Prior to inspection, deal they accepted was 225k with only appraisal, financing, and inspection contingencies.  Appraised for 220k. Inspection revealed it needs a variety of repairs.  The most concerning is mold in attic and crawl space. Other repairs are several but more straightforward.  Seller bought a year ago, renovated one unit in that time.  I think anywhere from 10-25k can resolve what was found in inspection. rough estimate.

My understanding is, the seller wants to sell due to having more properties than they can handle, they don't want to deal with repairs, want full price despite appraisal and even want to challenge it.  Sounds like they're leaning away from having to reduce the price much for repairs.  I'm not paying over appraisal or full price and have to do a bunch of repairs.

I suggested seller finance as a compromise.  

Seller benefit: 

Get full price or more, despite appraisal

Not be responsible for repairs or concessions therefor (except mold, I said they need to remediate that because they have to anyway sale or not because mold can be greater than what meets the eye)

Achieve the benefits they intended originally with the buy and hold strategy, minus landlord duties

Buyer benefit:

Less down payment than the 25% required by lender in exchange for taking on repairs (frees up cash to rehab)

Fewer challenges qualifying that come from conforming lender

Possibly lower rate negotiable for taking on project and for paying over ask

I would enjoy reading your ideas for an offer to make in terms of down, price, rate, and other terms.  If any of you have done a seller financing deal, please share.  Thank you!

[Dom Cassissa]

I haven't done any seller financing so take my comment with a grain of salt. But what I'm suggesting is what if you can work a deal with seller, be willing to pay full price BUT ONLY if seller is willing to hold a very favorable interest rate. I'm not sure what you're being offered by lenders but we can all agree it's going to be probably 5%-5.5% at the very best right now. Would this deal make more sense to you if you can get him to agree to maybe a 2.8-3% rate that he holds?