@Michael
@Michael Le @Steve Vaughan
I admit I'm a bit lost; this is becoming a high level RE discussion and I really appreciate the time you are taking to talk it through with me.
Michael, I may not completely understand Present Value and the example you gave, but to answer your question, yes, $62,402 is a very good price for the house. What has me on edge about the deal is the lack of immediate cash flow, because that is all I've ever considered with traditional financing. I'm putting the information in my analysis calculators and I see red everywhere! The benefits, though, are the purchase price, the money needed to get into the deal and get it rent ready, and ownership in 5 years. All this, and I don't have to deal with a bank and jump through their hoops.
Steve, it's interesting to read that none of your seller financed deals cash flow well. Our W2s are strong; life does happen, but I don't believe we will have a problem meeting our obligation to the seller. In terms of exit strategies, I guess we could get financing with a bank down the line if absolutely necessary. This is NOT the goal. We'd like to own in free and clear in 5 years.