Looking for thoughts on a proposal

[Chris Luksha]

Hi all, 

Recently I did some work for an out of state landlord and asked him if he wanted to sell his SFR rental property. I was looking for some input from those that know better than I. Here are some basics on the property.

• SFR Rental
• Long term (3yr) tenant pays $1350/mo + all utilities (tenant is local school superintendent)
• Owner possibly refinanced at $100k in 2003
• .26 acres
• 2 /1
• 1 1/4 story cape
• Waterfront
• Detached 1 1/2 story garage
• Town Assessed Value: $122,300
• Actual resale value: potentially around $150k 
• Deeded access 

I have put in 10% management, 8% vacancy, and about 6% others (capex, maint, etc.)

So here is what I would like to send his way for a seller financed offer with no money down:

• Seller financed at 5% (30 yr amortization) with a 5 year balloon payoff payment
• Balance payoff payment at 5 years (~$91,829)
  • Early payoff <24 mos = 10 points ($10000)
  • Early payoff >=24 mos <36 mos = 8 points ($8000)
  • Early payoff >=36 mos <48 mos = 4 points ($4000)
  • Early payoff >=48 mos <60 mos = 2 points ($2000)
• Option for buyer to extend payoff date up to 15 years (within 6 months of payoff date, at a cost of 2 points.)
• Buyer to pay all title, recording, transfer fees etc.

Total Interest Paid (If paid in full at five year mark):$24,038

Total Sales Price with interest (If paid in full at five year mark) : $124,038

Keeping in mind that we make money on the purchase, I would like to offer a fairly low purchase price that would help me get my foot in the door, and continue to give him monthly cashflow and delayed capital gains.  And oh yeah - I am looking at this solely as a buy and hold. No flipping unless some crazy offer comes up.

So what are your thoughts?  Am I crazy?  Too high? Too low? I figured my numbers wrong?  Thanks all in advance!  

Chris