Pros/Cons of buying a house through seller finance

[Corey Bogaski]

Hey, i have an opportunity to possibly get a 3-unit (all 1b/1bath) through seller finance. I have a few questions. 

How to structure the deal? 

Does the loan i will technically be assuming add to my Debt-to-income ratio? Will that affect me trying to buy a property with conventional loan like FHA or VA?

If i put money into the property and force appreciation, am i able to cashout refi on it? 

I am just trying to understand all the pros/cons of buying a property seller finance. Thank you to anyone in advance who answers and hope this question helps others as well!

[Mason Hickman]

@Corey Bogaski

The terms are where the deal can be made or broken. It is difficult to answer how to structure because the seller will likely have their own thoughts. Things to focus on and levers to pull: interest rate, down payment, amortization, term of loan, interest only periods, prepayment penalties, etc. 

From a traditional lender perspective, they likely will not see this property in your DTI because it likely won't be reported. Depends on how deep they dig and the loan you are going for.

Yes, you can cash out refinance after improving value.