ATLANTA, GA potential buy, need money

[Jorge Guerrero]

I stumbled upon a potential deal, for an apartment home 2beds/2.5 baths, 1200sq. The seller lost his good job, and needs to sell his rental property to get his finances together. I can negotiate a purchase price of $120,000 and seller pays all closing cost. 

Why do I think this is a good buy?

The property is worth about $130,000 and has a reliable occupant that pays $950 a month in rent. 

What do I plan on doing with the property?

continue renting for 2 more years, collect $950 in rent for 24 months for a total of $22,800 and than selling for what it appraises 2 years from now. 

What direction am I taking to finance? 

That is what I need advice on, I need to find someone to finance the deal. Im all tied up with another investment property and have no capital to put down. 

Here are both options I plan on offering my potential investor: 

1. take out a 3 year $120,000 loan (my plan is to sell within 2 years, just asking for 3 years so I wont be in a rush or pressured when time to sell) and give $400- $500 interest only payments every month for the entire loan and a balloon payment of the $120,000 after closing. so assuming he/she accepts $500 a month for 24 months, that will be $12,000 in interest, a 10% return on the investment.

2. The second options would be ask for $120,000 and have a joint bank account and all the rent gets deposited to that account, also all expenses will come out of that account for the 24 months and when the home is sold, we would split 50/50 on the profit. I would make all decisions on repairs and necessary expenses for the home to be presentable when time to sell. 

Please let me know what you think.