Seller Financing for BRRRR Strategy?

[Jesus Sosa]

Currently have an opportunity to obtain a property via owner financed. Debating on how the terms being structured will effect my BRRRR exit strategy.

PP: 76k

Down Payment: 6K

Interest: 8%

Term: 20 years

Monthly payments: ~550$

Now, my concern is with a little bit of cosmetic work and seasoning period. Could I later cash out refinance this property with a greater value without it affecting the terms of 20years at 8%?

Let’s say I want to wait a year or 2 to refinance, I would have already paid 13,032$ (2yrs). 3,451 on principal and 10,008 on interest. The remaining of the balance is $66,549 (principal). With my refinance would I have to pay those remaining 18 years of interest on it? Or just pay the full remaining balance?

Sorry for making this confusing. Thanks you all on advance.

[Robert Verdi]

If I’m following you correctly. It would depend on the terms of the owner financing. I’d have an attorney take a look at the financing terms closer. Make sure there is no prepayment penalty. 

Some other thoughts, does it cash flow, how much for the cosmetic repairs and what is the arv?