First Seller Financing Deal - To Do Or Not?!!!

[Patti Royster]

Hi there.

My husband and I work in real estate together and have been learning as much as we can about seller financing.  We came across this deal and have been considering it but will probably walk away.

The property is a legal duplex 3100 square feet and 100 years old.  Kitchens and bathrooms would need to be replaced eventually.  Galvanized plumbing - may not be as big of a problem since there is only one bathroom per unit.  One unit on top with 4 bedrooms/1 bathroom and basement apartment 2 bedrooms/1 bath.  Rent upstairs is $950 and basement rent is $700.  Owner is 71 years old and is cashing flowing $420/month.  Rents are probably about $50-100 low for both units.

We explained seller financing to her and offered her $30K after giving her an analysis of what she could realistically walk away with if she sold it with a realtor.  She spoke with her 4 kids who thought she was getting taken and now wants $51K for the property.  We were going to have the property inspected but not so sure now we really want to invest in a 100 year old property even if it cash flows well.  Owner owes $164K with $30K at 11% and the rest at 2.92%!!!  Sort of thinking of doing the inspection which will itemize all the things that will need to be updated to show the seller.  We know she wants $36K to pay off her mortgage but she will have to pay 25% in taxes on the sale.

Would appreciate any experience or thoughts you might have!  Thanks in advance.