Making first offer today - thoughts/ suggestions!

[Stephen Dickey]

Making my first offer this afternoon. Offer is for a duplex that is cash flowing 1300 per month. I am going to offer seller, who owns the property free and clear, to do seller financing, in a deal where I will pay him the full retail price of his property, for $135,000. The terms are that I am going to pay him 800 per month for 120 months, on the 121st month I will pay him balloon for remainder of loan. I will cash flow 500 per month after paying him.Yes it is zero money down zero interest but it works for him bc he no longer has to deal w property and it will save him capital gains taxes. It works for me for obvious reasons. Any ideas/comments/suggestions? It seems fairly simple to me. Am I overlooking something?

[Michell P.]

Hi Stephen, 

So it brings in 1300 total?  Are you accounting for any costs? 

Taxes, Insurance, Vacancy, Maintenance, Cap Ex, PM, Utilities?  

If it just brings in 1300, then it seems that you may end up losing money / coming out even MoM.