😵‍💫HELP!!😵‍💫w/ Seller financed "agreement for sale/ contract for deed"

[Johnny McKeon]

Hi biggerpockets 👋

I'm working with an off Market seller who has five 4-plex's (20 units) in Mesa Arizona. 

Him and his wife are selling off all their properties except for a beach front property that they purchased in Madera beach Florida. They are selling everything because they are in their 60s and don't want to be in the rental business anymore and don't want their rental properties anymore and don't want them back and they want to move to their new property in Florida to redevelop it and they said they needed approximately $900,000 in their pocket to renovate their Florida property.

For the five 4-plex's they want to seller finance them. The buildings need interior renovations and the seller has approximately 6 empty units out of 20 and the rents are all below Market so this would be a value add project

Originally, they wanted to seller Finance doing a deed of trust and promissory note but now they want to seller finance doing an "agreement for sale" or "contract for deed" 

because they said they are worried about foreclosure. they don't want to go through a Lengthy foreclosure process and they just want to get their properties back easily if i was to default. 

They said part of selling to me is though they don't want their properties back and they just want to be done with them

I currently on 10 properties with 45 multi-family units in the Phoenix Arizona Metro Market and I showed them my bank account balance and I've showed them my credit score and that I've never missed a payment on any of my mortgages including the anyone deal that I did sell her financing and I paid back that seller. And the current seller finance deal that I have that I make payments on time every month

I am a licensed realtor here in the Phoenix Metro and I also am helping my 20yr old brother find a 4plex to house hack so he can follow in my footsteps. He's pre-approved with FHA 3.5% down at $600k so a little less than what some of the 4-plex's are selling for in the valley.

 The seller wants $720k for all 5 buildings but he agreed to sell one 4-plex to my brother for $600k but the $120,000 difference will be tacked on to my seller financed loan amount

Here's the seller financed purchase price when i buy the 4 buildings and my brother Purchases 1 building with FHA. The seller is not paying any commissions or any concessions

 Purchase price: $3,000,000 (4 buildings at $750k per)

Down payment: 10% = $300,000

Loan amount: = 2,700,000

Interest rate: 5.5% interest only

 monthly payment: $12,375 (due to sellers every month)

My main question and concern is does anybody have any familiarity with doing

 An "agreement for sale" or "contract for deed" that they can shed light on ?

I have done two seller financed deals where we just did a deed of trust and promissory note and I have some other properties that I just purchased out right using conventional loans, DSCR loans, VA and FHA for my house hacks

What are the pros and cons as a seller wanting to sell as an agreement for sale? 

And what are the pros and cons as a buyer wanting to buy as an agreement for sale?

How would this affect me remodeling the properties, getting a HELOC or doing a Cash out refinance later? From what I was reading it says I wouldn't actually own the property.

would you personally want to do an agreement for sale? Or Would you just explain better how a deed of trust and promissory note work?

Thank you so much to everybody for your help! I appreciate any wisdom or guidance that you can share

[Caroline Gerardo]

Unless you solely own on title real estate you cannot refinance, it's considered a purchase loan if you want to get a loan.

Seller who remains ownership/title can refinance with cash out. If seller had to file BK the properties go into the BK. Any lawsuit on seller can get recorded on title as lis pendens and eventually be a judgement.

No down payment and 5.5 rate are great plus(es). However, how will you know if he pays off the existing mortgages? You can't get title insurance to cover you in the event of default/his probate if he dies/liens/... 

Who holds the wet signed contract? Is it recordable?

You need to vet the seller. Are you willing to marry him? ( I use this term often to demonstrate the level of trust you need.)