How to execute a seller financing deal

[Cameron C.]

Hey BP,

My landlord and I are currently kicking the tires about transferring ownership of the property I currently rent and therefore allowing me to house hack it from the rent my other 3 roommates are currently paying.  The home is in a hot rental community of Pittsburgh (Southside).

I am waiting to hear back from him tomorrow about his final position but we have a ballpark number the would make sense for both of us. Because I'm "house hacking" this property (it will be my first investment) I would attempt to do 3% down on a conventional first time home buyers mortgage. It wasn't until today that I remembered the concept of seller financing. One obvious benefit to this route would be the elimination of PMI and I would be able to shorten the term of the note etc.

Tomorrow I should know what he still owes on the property, if anything, and will be able to introduce the concept to garner his thoughts.  My question to you is relative to general advice structuring one of these agreements and then executing on such.  I want to make sure I am fully confident of all of the pros / cons for both sides so that I can pitch a strong case for why this makes sense when I get him on the phone.  The other thing I am trying to understand is whether or not this is an option if he has a good deal left on his mortgage?  I understand that if it's not an incredible amount that I could make my down payment equal to that but what if it's a lot more?

In short, any assistance to help me understand this would be wildly beneficial.  I would like to make a strong, clear case tomorrow and want to ensure I understand all of the details.

Thanks!

Cam