6-Unit with Owner Finance

[Andrew Hofing]

Is this a good deal for a first Multi-unit?  I'm kinda caught up because of the balloon @ end of finance.  

Seller Financed Terms:

Sale price: $165,000

15% upfront cash deposit and $1538.27/month for 60 months with a balloon payment due at the end of the term.

Interest rate: 2%

The monthly payment of $1540 would encompass the principal, interest, taxes and insurance.

$553.35 would be applied to principal

$153.37 would be applied to interest

$831.55 would be applied to taxes and insurance

Total payment of $1538.27  or 

$165K for the building with 15% down and $1525/month for 48 months

Gross Annual Rental Income = $37800 or $3150/ month

Annual Operating Expenses

Taxes & Insurance $9978.60

Water/Sewage $3600

Waste Management- $1200

Gross Annual Operating Expenses = $14778.60

Net Operating Income = $23021.40

Or $1918.45/month in positive cash flow

Cap Rate = 14%

I'm thinking of trying to negotiate the purchase price down a bit as $165 is above market value.