Without knowing your market I would suggest you do the following:
1. Estimate your own income and expenses based on your knowledge and determine the current cap rate. Don't always go by what the owner tells you. I would then research the comps regarding the cap rate and see how it compares.
2. Review the rents and comp it out to similar units. Any room for upside, which would increase value? Are they high for the area, and is there a possibility that you may have to reduce them to attract tenants? What is the outlook for the area in general?
3. Sounds like the $35k is most if not all of what you have. Nothing wrong with that, but you need to be prepared for things that could cost serious money with this property. I would hate to see you close, and then not be able to do a repair 6 months down the line that would render some if not all of the units un-rentable. DO NOT USE CREDIT CARDS
Owner financing is a great way to buy but a deal still needs to be a deal. The owner financing terms look attractive but you need to make sure the purchase price is attractive as well.
1 CAP comes out to around 6.8%
Income 6138 - (Ins 200/mo + VACMaint 10% (613) + Utilities 480 + Tax 666 + Mgmt 613) * 12 / 650 Value = 6.842% CAP Val
2 I believe the unit itself is under priced. Comps for 4br in the area come in around 620. I'm not a pro at this though
3.I'm with you. I'm leaning towards finding a way to lessen the risk for both myself and the seller
Glenn