Seller Finance a portion & HML to BRRRR

[Patrick E. Blankenship]

I will try and be concise in my question as I am searching for some opinion/advice:

Purchase $70k

ARV $160

Rehab $40k

All in with closing using HML is around $117-120k with pts added

75% of ARV $120k

Rent expectation based on comps is $1400. I am planning 8% vacancy and a $300/month expense/maint/etc. given the amount of rehab. Everything net of the debt service goes into an account to build up reserves. Not chasing cash flow however if under $120k all in it works out to about $200/month. No PM- we are local. Already pre-approved for the refi at 3.65% over 30 yrs so literally working out how to do this with little to no money outside the holding costs. So the question (I may have answered it myself)

- seller finance X amount

- HML X amount

- pull out $120k to cover what I have in- or the majority.

- A rehab at $40k means I pay ~$17000/ leave that much in, if rehab at $30k its only ~$750. This is my big question and working with our contractor to solidify the #.

Possible solution/course of action: I plan to subtract the rehab from the $120k (75%ARV) and call it my offer...and possibly skip the seller financing but looking to see about creative ways to set seller financing up? w/ the usual balloon payment after a few years and some type of up front down payment to satisfy the seller's need. Problem comes from the monthly debt service + expense+ seller financed portion...blows out the NOI.

Any ideas outside dropping offer price to stay within the ARV? Gracias BP...