Calculating interest for a seller finance

[Kim Handelman]

Hi Everyone,

I have found a 4 unit property that cashflows well at a price I know the seller isn't going to like. I thought I'd offer him seller financing and show him how he could save on taxes and make more on the property by holding the note. How do I calculate interest to show him how much more he'd make over the life of the loan? I seriously need to know how to do the math. And, I know he won't want to hold the note for long since he's 84. Do I tell him interest only for 3 years and then get bank financing assuming in 3 years I'll have enough of a track record that banks will finance me? I'm new so I don't even know how to figure out interest only. Is it calculated by month or by year? Thanks in advance for dumbing it down for me.