Multi Family Seller Financing Advise

[Bryan Field]

Hello BP!

I am a new ish investor looking for some advise on a multi family deal (4 units) with initial asking seller financing terms of 

• Price: $824,999
• 10% Down Payment = $82,499
• 10 Years Interest Only at 5%
  • Monthly Payment = $3,093
• 5% Prepayment Penalty for the First 5 Years

The building is 100% rented bringing in $3,950/month. There would be an opportunity to increase rents and everyone is MTM.

The land also has space to develop another 2 units for value add.

Hoping someone can help me understand the pro's and con's of an interest only payment for 10 years. 

Looks like the cash flow here is just under $1k/month ( without factoring in Maintenance/reserves etc.)

Thanks!