Does this purchase make sense?

[Sandy Hu]

I'm asking for advice to see if this purchase make sense. It's 5-unit apartment building in OC, gross income $74340, op expense $20525, purchase price 1.1M

Downpayment: 500k

1. My input: 300k line of credit, current interest 6.25%, not fixed.
2. Seeking extra 200k

Extra 600k: seller financing, 5% 7 year interest only payment

Let's do a 7-year calculation, assuming i sell it after 7 years:

Scenario 1: 200k from an equity partner, we share the profit half-half

Expense: $18750 (let's assume my 300k is a fixed-interest loan, $18750 will be one year payment) + $20525 + $30000 (seller financing annual payment) = $69275

Cash flow: $74340-69275=$5065/year

Cash flow and capital gain after sale will be split evenly between 2 owners.

Scenario 2: 200k as a 5% fixed-interest loan with interest only payment

Expense: $18750 (let's assume my 300k is a fixed-interest loan, $18750 will be one year payment) + $20525 + $30000 (seller financing annual payment) + $10000 (200k loan annual payment) = $79275

Cash flow: $74340-79275= -$4925/year

Cash flow is negative, but capital gain after sale will be 100% mine.

Any thoughts and comments is appreciated!