Dallas TX // Seller Financing Deal on the Table, First Timer

[Daniel LeGare]

I recently found a house in Dallas (listed on Zillow for 120 days) that is 100% owned by the seller, and they're open to seller financing. I am interested in buying the house and renting it out. I have the ability to put 10% down. Big potential downside- both a selling and buying agent are involved here and I believe they're expecting their 3% each. 

I have never purchased an investment property before (although I do own my primary residence), let alone done a seller financing deal. Can someone walk me through the thought process I should be using when constructing the offer? I'd need the interest rate to be roughly 5% to breakeven on an interest-only loan, and was considering a balloon payment in 5-7 years. I know that interest rate is WELL below market. So maybe this simply won't work. 

The seller is highly motivated to sell and has already knocked their price down 6% since listing it 4 months ago. I'm open to all suggestions, advice, and criticism.