Seller Financing - Real World Deal

[Joe Conklin]

So I am working with an investor who is looking to owner finance a rental.  This is my first time using this approach and have some questions.  I want to ensure that I am understanding the deal correctly.

Purchase Price: $140,000

Down Payment: 10% ($14,000)

Interest Rate: 5%

Balloon Payment: "1 year Balloon payment of balance".

Rent for area: $1,400 / month

Taxes: $4,000 ($335/month)

Questions:

1. What is "1 year Balloon payment of balance"?  Would it be 12 months of P&I = $671.56 x 12 = $8,058.712

2. When determining "cash on cash return" how much should I factor into deal for closing costs (attorney fees) etc.

3. Any other factors that I am overlooking when dealing with seller financing?  I want to make sure that I am looking at the numbers correctly before determining cash flow and cash on cash return.

4. Advice would be appreciated.  This deal doesn't look good right now but may be a starting point in the negotiation.