Seller financed IDU

[Joseph Michael Sutton]

I’m working a deal with a property owner who owns the unit free and clear. The owner enjoyed monthly rent payments as cash flow, so I offered seller financing to keep his cash flow going, though being lower. I went out and walked the property earlier this week and am going back in a few days to make an offer. The unit is a 1 bed, 1 bath individual dwelling unit about 650 sq ft with a porch, in a lot next to his primary residence. It’s made of brick, well maintained, and renovated within the last 5 years. The owner had the same tenant in there for the last 10 years but the tenant recently trashed the property(inside) and left the unit.

I have found it hard to find comps in the area and can only base it off of similar rents, so a buy price is a little difficult to structure. In this scenario, what would you offer?

I have ran the numbers and an offer of $30k at a 15yr gives me cash flow of $220 a month and his monthly income would be about $220 as well. Is this offer too high for such a small unit?