Seeking advice on structuring a seller-financing (I'm the seller)

[Dawn Dewald]

I am looking for advice and strategies for how to structure the seller-financing deal.

I have four lots of city land to sell, and a buyer who wants to arrange the sale via seller-financing so he doesn't have to tie-up his own cashflow with a large down payment. The buyer is interested in buying two lots immediately, with the option (and all likelihood) of purchasing the other two lots in a few years. The buyer would prefer a shorter pay-down period of 3-5 years, which is manageable for us both. In all likelihood, we will set up the agreement through a formal escrow account, for mutual protection and convenience, since I am remote from the property. 

Also, these are small lots (residential in size), and the buyer is a small business owner. So this is not a big, corporate deal.

1. How is the interest rate set? 

2. Can we stipulate a yield maintenance period, or is that overkill?

3. How would we determine the amoritization period? Can it be for a shorter period of 10-15 years (rather than 30)?

4. Is a balloon payment a best practice? 

5. Would the purchase of additional lots be set up as a separate contract? 

6. What am I not asking about? Examples of past successes welcome :) 

I appreciate the BP community for taking time to offer suggestions.