MFH with owner financing

[Erik Dofelmier]

Hey y’all. We are scheduled to close on our first duplex in about a month and it’ll be a complete rehab using my heloc funds (tried to get a rehab loan but no joy since I’m not yet with a local bank. Yes, I’m working on it. Valuable Lesson learned 😁). 

But prior to this duplex, we were looking at another deal on a MFH that fell thru. Long story short it came back up on the market, and the seller is willing to come back to the table. As of now he’s offering seller financing with 40K down. 8% amortized over 20 with a 91k balloon payment after 5 years. Here’s the catch. The homes currently can’t get financed because they’re separate structures on one plat map. However I do have a plan in place to get it to be able to be financed. There are current tenants that pay approx $1700 total (paying below market rate), so by my calcs it’s cash flowing approx $245 with an 8.5 cap rate. Should this be something we look at taking on since it’s financed differently?  Will I be leveraging myself more than I should (I’d be using more of my heloc $ for the DP)?  Or should I wait and reattack it post duplex closing if it’s available?  Advice greatly appreciated.  Thanks.