How Can I make this Owner Finance Deal Work?

[Nixon Vayupak]

Need some input on this property with an "Owner Finance Opportunity". ARV is about $570K. The house is built in 1969 and comes with 5 bed and 3 bath with a total 1825 sq ft, pool, attached garage. The estimated repair cost includes Pool and HVAC comes out to $70K. Submitted offer at 400K and owner did not say no. But she indicated that she does not want to get all of the money up front to avoid tax and would rather owner finance the entire deal. So she then said, how much more am I willing to pay if she completely finance the deal. This is a curve ball for me.

So I was thinking along the concept of "Owner Carries the Loan". We would create a mortgage note (Deed of Trust) and she will be in first position and have escrow hold the deed until it is paid off. I've been told if the seller wants a higher price that the terms should be very favorable in the loan for buyer. So I was thinking $420K with a 4% 30 years amortize loan, so is this ideal or am I thinking the wrong way.

Please note I also checked the local average rent in the area and it pays about $2300 a month. Please provide your suggestions and any tips on a proper exit strategy.