Owner Financed SFH with Low Cash Flow - Deal or No Deal?

[Brian L Dowler]

I am a Pittsburgh based investor, focused on high quality SFH. I have an opportunity to use my self-directed IRA to buy a house at $240,000 (likely less) with 10% down and paying the owners $1,000 a month with no interest. In 60 months I have accrued $60,000 in equity on $24,000 down, but with only about $12,000 cash flow with a starting rent of $1,600 per month. I am not currently looking for cash flow, so am fine with taking the equity build as a retirement fund builder.

This would NOT be a good deal without owner financing - in fact the cash flow would likely be negative. But saving $750 a month in interest makes it interesting if banks are not involved.

After 5 years, I could refi through a bank, but would then again have low cash flow even with the equity build. So I would likely sell - or look for a LTO buyer.

The question is, do you feel this is a decent deal?  If I sell in 5 years, the Cash-on-Cash return is good. But it is sort of a dog after the initial 60 months. Any ideas?