Seller finance deal analysis

[Danny Jasper]

I have a property that delivers a NOI of $43k ( I added in $5k for miscellaneous expenses to get to the current NOI). Number not confirmed but I did look at the T-12 for the property. The owner is near retirement and suggested we do a creative financing approach to the property. Here are the specifics. How would you approach the deal? I am trying to do this deal no money down.

Asking is $400k

Units 11 units

NOI - $43k (includes taxes and insurance)

Mortgage balance from owner : $240k

The owner initially said that $100k down would work and he would finance the rest but that doesn't seem to work because of the mortgage currently on the property, he would be using the money that I send him via interest to pay off the mortgage.

My initial  approach:  Hard money for 60% of the value and the seller carries a second for the remainder at 5%

Hard money at 10% - Yearly interest of $24, 420 ( refinance at the end of the 1st year)

Seller Financing at 5% - Yearly interest of $8,140 (30-year amortization with a 3-year balloon payment)

Total Yearly Financing Costs - $34,863.83

Yearly cash flow from property  - $8,337.17

Monthly cash flow - $694.76

I would be responsible  for taxes and insurance

He mentioned that this would be a contract for deed.

Any thoughts on this deal would be great.