Three 4-Plex Deal - Owner Financed

[Shawn Rasmussen]

Hi Everyone! I've been learning everything that I can and running annalist on deals. I think this one might be a winner, but wanted to see what the forum thought. Here are the estimated numbers...

Three 4-Plexes - 12 Units - 8 2/1 & 4 1/1 - 12 Fridges & 12 Stoves + 3 sets of washers/dryers -    Built in 1974

Asking Price: $340,000

Estimated Total Income: $5,600
4-Plex A= $2000 (Four 2/1 Units @ $500/month)
4-Plex B= $2000 (Four 2/1 Units @ $500/month)
4-Plex C= $1600 (Four 1/1 Units @ $400/month
Laundry= $???

Estimated Expenses: $2,800 (50%) Not including mortgage payment
Vacancy= $560 (10%)
Cap Ex= $560 (10%)
Management= $560 (10%)
Taxes= $224 (4%) Based on 2016 taxes
Repairs= $280 (5%)
Insurance= $336 (6%) Hazard - Not in flood zone
Lawn/Snow Maintenance= $84 (1.5%)
Unforeseen Expenses= $196 (3.5%)

I'm trying to come up with creative financing. If I can get the owner to finance the sale, what do you think about this plan?

Seller Financing:
Price= $255,000 (75% of value - considering favorable appraisal and inspection)
Down Payment= $12,750 (5% Down)
Interest Only Loan= $242,250 (5 years @ 7% w/ balloon payment at end of year 5)
Monthly Interest Payments= $1,413.13
Total Interest Payments= $84,797.80 (Over 5 years)
Balloon Payment= $242,250 (Bank Financing)
Total Paid To Seller= $339,797.80

Bank Financing:
Loan= $242,250
Fees= $3,633.75 (1.5% - Paid in cash)
Monthly Payment= $1,375 (5.5% @ 30 years)

Cash Flow:
When Seller Financed= $1,386.87 per month ($115.57 per unit - $16,642.44 per year)
When Bank Financed= $1,425 per month ($118.75 per unit - $17,100 per year)

These numbers are based on estimates. I still need to get firm numbers from the current owner. I don't know if tenants pay utilities or if the owner does. Utilities could make or break the deal. Or, the price would have to come down to make the numbers work.

Thoughts or suggestions? Do you think a seller would laugh at that deal? Would the lower sales price hurt me in the future or could it be structured in such a way that it sells for $340k, but the seller kicks in so much? In my mind, I want 25+% equity by the end of year 5 so that bank financing is easy to get approved. Does that sound like a good plan?