Need advice how to ask and structure seller financing option

[Kaylyn T.]

Hey everyone, I am new to the forum and looking to get some advice on how to structure a seller financing deal. 

I'm looking at a rehab property ocean front in Maine. The property is where most of the value comes from, but it's also has somewhat historical significance because it is the original home of a pretty famous artist. The owner inherited it from his mother who recently passed away. He has no emotional ties to it and is looking to get the best offer. But it needs a lot of work - foundation issues, new roof, new siding, maybe mold and cosmetically it looks like the last time it was renovated was the 60s. 

It is huge, probably 3000 square feet. It can not be divided into apartments, but it has probably 7 bedrooms and 2 or 3 baths. One bathroom doesn't work. The kitchen needs a rehab.

It's an oil furnace which would have to be converted because I can only imagine the heating bills would be insane to heat the place.

A local realtor thinks 250 max for the property, but the seller wants 400. I do think the property alone is worth 250 if not more being that it's ocean front and in a great neighborhood within walking distance to town and the beach etc. But I see both the upsides and downsides of this house sitting on the property. The size being one of them for both resell and renting. 

However, I love this property and would look to try to rent it out probably as a vacation rental where it would bring in 2-4k weekly easily after all renovations are done. I currently own another property down the street so I am familiar with the rents in the area.

I'm guessing 150 in reno costs.

I offered 325 but the seller's brother thinks it's a lowball offer - and I was going to have to come up with some creative financing to make that happen. It hasn't gone on the market yet so the seller is thinking he can test the market at 400k for the summer or possibly sell it to a historical foundation which I think would take a year to deal with and probably won't fly.

I want to present a seller financing option considering that the brother's don't have a mortgage on the property. I think they see the complications in selling being that it is so huge so there is a limited market.  

What would be a good offer to present for seller financing this place? I was thinking 340 at 5% which in 5 years they would make more than their 400k and not have to deal with realtor fees. But would really appreciate anyone's advice on this as I have never put together a seller financing deal before.

Thanks! Kay