Banks are lending anywhere from 4 to 4.75 on 25 yr commercial.If the deal is terrific, then take his loan, reposition the property and refi in the near future to pay him off and possibly extract some capital for yourself.I always like to hear seller financing deals.  

People who get suckered into these deals may be able to extract cash flow in good cases, but that doesn't mean it's the best possible first move you could make into the multifamily RE investing world.What I would do is basically tell myself that this place is worth about $10,000 per door, and that's it.

Hopefully it's a quick an easy extraction (let me know if you are interested in a couple of tank pullers I can refer you to).  

If it's a short sale or foreclosure , you as the second or perhaps the third offer, have much better leverage to extract a better sale price.

Once the debts are paid off, the income remains.If you can, acquire income producing assets well below market, extract some equity and use that to reduce your principal balance on your FHA loan.

The areas around the schools with grad students who treat the units well and most have partying out of their blood as they finish the final years to graduation.Then you have some rougher areas around Athens with higher caps but the tenants are more of a constant care thing to extract the rent.

They hope you only catch 3 out of 10 things they are hiding etc. and will still extract more money out of you on the sale.This is why if it's a listed property working with a commercial broker who looks over these things everyday is worth it especially if the seller is paying for it.

I am trying to extract hidden equity in the home and would like to get it done right, with all permit/paperwork for under $10,000 .

Some people do very well in this business extracting every ounce of debt they can obtain.

This is definitely an option to extract cash out of the asset in order to leverage into another asset(s).