Seller Financing/Deal Structure/BRRRR

[Brandt Miller]

Hi guys, I am looking to get some opinions on how I should structure a deal. I have found an off market 8 unit property that is currently in dire need of repair. The owner owns an abundance of real estate but is getting old and has started to let his properties deteriorate from neglect.  it is on 5 acres of land at the top of a hill and if fixed up would be a gorgeous piece of property. I found this property about a year and a half ago and have been slowly convincing the seller to get sell it to me ever since. The make up is two 4 unit buildings next to each other. Currently only 4 of the 8 units are rented with 1 tenant in one building and 3 tenants in the other. 

As far as numbers go, the seller and I have agreed on a 400k purchase price. I also have had a trusted contractor come out and look at the property. He estimates that each building needs around 100k in repairs to get everything where it needs to be in order to get current market rents. After getting the building fixed up, based on area comps it should be worth around 850-900k, Being all in at `600k (400k purchase plus 200k in rehab), if it appraises for even just 800k, at a 75% LTV that's right at 600. I should be able to pull all of my cash out and still cash flow nicely.

My question is how do I structure this deal. I have 100k in cash to invest currently. In the buildings current condition, I couldn't get a commercial loan because there is basically no cash flow. In a perfect world, I would have the seller give me 6 months of no payments. I would get 100k in hard money to accompany my 100k cash to fund the rehab. Then in 4 months after it is rehabbed and tenanted, I would get a cash out refi at 600k from a commercial loan and pay off the seller, hard money lender and get my 100k cash back out. 

This all assumes the seller will give me 6 months before I pay him out. I know many people seller finance deals but I cant seller finance forever because I need to do a cash out refi to pay back my rehab costs. If he will not seller finance, my back up plan is to try and get two residential loans, one on each 4 plex but with a 25% down payment on each, my 100k cash is gone for the down payment. I guess I could hard money finance the entire rehab and then refi but that leaves me making mortgage payments and interest payments during the time it takes me to rehab the property which would be a bit difficult. 

I know this is kind of long but thank for reading and giving any input. All of my previous rentals have been with just a typical 25% down payment but I need to get creative with this one. One last question...If I did convince the seller to give me 6 months, what does that look like in contract language?