Determining your cash vs. financed offers

[Shaun Reilly]

I have been looking over a lot of threads on seller financing.

Typically I see a lot of people talking about making your cash offer and 1 or more financing options as well.

Question is how do you determine what your financed offers are in relation to your cash offer? I'm not Wuss when it comes to math so I figure it has to do with figuring out the present value of the higher priced offer in the future. The values I get in my hypotheticals seem really high though.

Like for example if I was going to make a $100,000 cash offer but they wanted say $165,000 for it. I get out my handy dandy hardcore calculator and figure out that if I did a 10yr loan at 5% with them I could offer $163K (rounded) and get a PV of $100K.

Using the formula FV = PV * (1 + r)^n

So in this case I want a PV of $100K (The cash offer) with an interest rate of 5% (r) and a period of 10 years (n).

That seems insanely high to me to pay as a premium for a property for fairly unamazing terms.

I assume I am missing something fundamental in structuring the offers.