Is this a good deal?

[Kara Leboeuf]

This is my first seller finance deal, so I’m not really sure how to evaluate it. It is located in Norfolk Virginia, in a nice neighborhood, 4 minuets from the beach, right across the street from another rental of mine. My neighbor is attempting to sell it. It has been on the market for some time now and is not selling. I approached him about selling it to me and holding the note. He is interested. Now I’m trying to figure out how much to offer. He is asking $270k and owes $225. The house would be a buy and hold for me. Market rents are about 1700-1800 a moth. His P/I payment is $1112. Taxes run $2700 a year. The house needs about $1500 to be rent ready. What should I offer? I can only afford a small down payment right now, approximately 5k. I was thinking 75-100 a month over his P/I a month and then buy him out with a refi after 4-5 years with a conventional loan? Again, This is my first seller finance and evaluating it has really stumped me. Thanks for any input!