Owner Carry

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Hi all,

I'm new to the whole owner carry concept. I'm a little low on cash for the next few months, but I have a property that is listed on the MLS as an owner carry option. The owner says they'll carry it for 7 years with $5k down. What exactly should I expect from this? It's a $40k house that would be a great rental for about $700-800/month so if I did a conventional loan on it, I would pocket about $400/month after kicking in around $10k on a 15 year loan.

Should I expect to pay a much higher rate/payment if I do the owner carry? Also, I expect my cash flow to be lower because it's a shorter term than I would prefer but at the same time, I would invest half the cash so that might make sense.

If someone could run me through this, I'd greatly appreciate it.