Seller Financing Advice

[Aaron Metthe]

Hey all,

Question: My father-in-law is looking to sell me 8 units for $190K. I analyzed the property, and it's a solid deal. The issue is that he owes $110K on it. It'd be ideal if I could get him to seller-finance it. How do I propose the deal so that it is a win for him. I'd be willing to assume his debt, but don't know if that is possible. I also want to rule out traditional financing on that $110K for our discussion today. Since I quit my W-2 job, I'm on the edge of D2I ratio, but I have not been declined yet either. I've read Biggerpockets' posts on it, and listened to most of your podcasts, but still not seeing a clear path forward, so looking for all y'all's input to help me understand this aspect of financing.

My hunch proposal is a rent-to-own situation, where he still pays on his debt, but my payments pay for the principle, the interest that accumulates on his debt (3.5%), and then offer him 2-3% on top of that, in addition to the $80k to make it to $190k asking price; to be clear, he initially did not want me to pay him interest, but he also does not want to keep the debt in his name, in case something happens to me. 

I am open to any and all options, as well as a combination of things. Really trying to #BrandonTurner this thing :)

About me:

I have lived in an owner-occupied 2 family for seven years, and purchased a 4 unit two years ago, to allow me to quit my job and open up a coffee shop in Syracuse. These 8 units will then be used as cash flow for more deals, as I am still partially living off part of my other investments while the coffee shop gets on its feet. We (my wife and I) are beginning to pay ourselves from the shop, and in 6 months, will not need to use 4 unit cash flow for living expenses anymore.

My father-in-law's wife just retired, and he is already retired except for these 8 units. Off-loading them sooner than later allows them to vacation and enjoy life, so I want to present a well thought out plan when I have a clear path forward.