Just the fact that it's a townhome means there's 1 or 5 or 50 just like it, so I can't picture what could be so unique about it unless the OP is fleecing the seller and he knows it, and the seller has just realized that which is why he doesn't want to sell.

Penalties of these Federal charges may include:30 years in prisonUp to $1 million in finesThey have a "statute of limitations" - (with a third "T"  ;-) of 10 years from the date of the transaction - 10 years from now, you could get a very nasty call and hopefully, you put your reserve money in a good account that grew to cover legal expenses**********************************************And the universe could blow up as Doc says in Back to the Future " But, granted, that's the worse case scenario." 

If they notice you have another house and your debt to income can't cover it.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Pictures can be misleading. 

So, if the total payment was  2500 you would only need to cover 1000 dollars a month with your income. 

I ran into 1) not covering RE in CA 2) not covering vehicle in CA 3) requiring all our insurance to be with the insurer providing the umbrella policy.  

Are you looking to pay off the hard money loan, fund another investment, or cover property improvements?

Because there are nuances to seller financing, a lot of space would need to be devoted to covering the subject to make sense, and that requires sitting down to a cup of coffee for a long discussion.