Rental property Should I sell on CD Terms?? or Not ??

[Deanna McCormick]

Thanks BP.. 

I am a 60% owner of a property that is unique, has single family 6 br home (is rented) and 2 separate double bungalows total of 4 - 1 br apartments that are rentals. I manage the other owners 40% interest for a family member, that is in a trust. That family members son is one of the tenants. He has expressed desire to buy the property. I recently had it appraised and know the value.

He's proposed a CD for 5 years with about 30% cash down. Balloon payment at end of 5 years for balance. He figures to be able to finance the remainder balance of 70% at that time.

This would be a $250000.00 cash down payment which is equal to $4200.00 a month over 5 years,  which is more than I'm currently getting for income off the property. My portion split would be about 2500 a month and the other 40% portion would be equal to about 1680.

I'd add a 3% interest annually to balloon, until the CD is paid off, If he decides to finance it before the end of the CD 5 year term and pay it off no penalty, just the 3% annual interest on the balance.

Is there something I'm missing that I should consider. 

I have a attorney  and want to run this past her but I want to have a good idea if presentation of this is sound. 

My other choice is to offer property to 2 separate parties that have shown interest, plans for both of those parties is redevelopment. Tear down and rebuild.