Owner finance -deal or no deal

[Mike Gomez]

Hello BP fam, I'm in need of some guidance. This is my first time looking into a owner finance and I'm trying to figure out if it's a smart move and what else it would entail to ensure a good deal...

A neighbor across my parents is willing to owner finance his home to me to turn into a rental property. He is currently owner financing it himself and owes $70K. The home is appraised at $275, but does need some cosmetics. Does have a new A/C and roof. He also disclosed that he's behind on his taxes and would need a down payment in order to pay off the back taxes.. I would be purchasing for $240K, with 15K down at closing, and additional $5k annually for first 2 years so I would finance $215K over 30 yrs at 6%. My Payments are $1289 not including taxes or insurance. 

deal or no deal guys? Thanks again

If so, do I ask for title in hand? He said the original owner still has it. And how do i know the payments are indeed going to my loan how do i keep track of this without having to take someone's word. I'm worried that if i try to pay it off quicker, we wont really know what's going to principal etc... sorry i know it's a lot ha but i have so many questions and he's wanting to make a move. Thank you thank you

[Chris Seveney]

@Mike Gomez

So the current owner owns it, financing it via land contract to your neighbor who wants to sell it to you

First check with the current owner as most land contracts are not assignable. He could sell it to pay off the current owner but may not be able to assign it. You will want it assigned to you otherwise this could get very problematic down the road.

That is where I would start and if it doesn’t rent for 1800-2000 a month then it’s not a deal.