Offer Structure - Seller Financing & RE Mortgage - Creative

[Kirby Davis]

Hey guys! Looking for advice on how to structure an offer if we pursue a business opportunity. We've never done any creative financing or seller financing up to this point. This would be a real estate and business purchase. 

Details: 

• Real estate (retail space) valued at $3.5 million in last appraisal (likely some appreciation, as our market is appreciating quite well and continues to grow)
• Rapidly growing retail business - growth of over 30% in 2018, tracking 12% growth first quarter of 2019

Without giving too much detail on all of this, since I can't, I'm looking for how you creative folks would make an offer. The price is $4.95 million. 

Our offer would be contingent on the property we have under contract selling, and we would likely 1031 into the retail property included in this business sale. (Note the seller is asking $3 million for the real estate, as he wants to keep it with the business. Our offer would move $500k from the business sale to the property sale for our 1031 purposes. i doubt it matters a lot to him at the end of the day.)

This leaves $1.45 million, which we would like to ask for seller financing on (74% of the business price). I'm trying to determine the best way to set this up for cash flow and make the seller want to accept the offer. 

I've been looking at options like different interest rates, 15 year amortization, 5 year balloon payment, and 1 year of interest only so we can get the cash roll built up a little better year 1. Any advice on this? I'd really like 1 year of interest only at least, to help with reinvesting in growing the business.