Need advice for owner finance deal

[Greg Larson]

Hi BP,

I'm currently negotiating an off-market duplex deal that would be owner financed. I initially came up with an ARV market value of $222k based on recent comps. When I made my offer, the seller countered at an astronomical $345k for the duplex which I was stunned by. Anyway, I ran the numbers again at $345k with a 0% 30 yr note (no balloon) and it still seems to cashflow okay (slightly less than $200/door after management and cap ex).

My question is, if the property valiue is actually only $222k, and Im buying at $345k but at 0% owner financing, am I "overpaying" for the property in any way?  There would be no balloon on the seller financed loan, it would be a full 30 yr. 

I just want to make sure I'm not putting together a deal that could potentially become difficult down the line.  My goal right now is to produce cashflow that can be reinvested from day 1.

Thanks in advance for your advice and time!

[David Shakhunov]

Here is a good excel file for the mortgage calculator that you can download: https://www.mortgagecalculator...