Need some advice on structuring a deal with seller finance..

[Natalie Harper]

Hi everyone! 

Im hoping to get some advice on a current deal that I am working on. My husband and I are looking to purchase a property as a buy and hold investment. We will not get approved for a conventional mortgage through a bank because we have lived overseas for the past 5 yrs and can not show consistent income. We own a business here in CA that is doing very well but we are only coming up to the one year anniversary since we have opened and banks we have spoken with have told us to wait for 2 yrs. We recently found a property in our area for 820k. Its 5 bed/3bath that is completely refinished that could rent for 6k per month. The lot that it sits on is zoned for R3 so the plan is to put 2 modular apartment units increasing the overall rent of the property to 8k+ per month. The seller is willing to finance but wants to do an amortized loan with 20 percent down, 5% interest and paid out in 10 yrs. (Payments are too high in this case) I would prefer to work a deal with the seller to finance us for 3 years and then we will refinance with the bank to get a lower interest rate. We will add the modular units within the first year of owning which will increase the property value. I don't know much about structuring different kinds of mortgages so my question is - What kind of offer can I put together for the seller that would be in my best interest? Any suggestions would be super beneficial! 

[Casey Mericle]

Agree with the 10 year balloon in return for a 30 amortization schedule with no prepayment penalty.   That will get your payments low and accomplish your goal.