sounds like you have a great opportunity. i recommend the contact for deed route. as you mentioned you can get a lower down and more flexible terms. if you can get a 10-12 year ballon payment you should have no problem refi'ing out prior to that with a conventional loan and pay off owner contract. i would try to get the per unit down. you could try to show the total amount you would be paying when you add interest into the equation and see if he will come down on asking price, at least to market if not below. as well as play up the continued cash for with zero management headaches. ultimately if it cashflows well and you have good fixed debt for 10 plus years my experiences has been that price per unit is less of a factor. cash flow is king.

I was initially surprised b/c my lender has been great and has always included about 80% of new rents on a potential purchase into the equation.

Ultimately whatever you end up paying for the property is going to go into your equation to determine your cap rate.

Which equates to an potential expense even for small simple matters (applies in city of chicago). 

END OF STORYTake the emotion of it out of the equation.....its irrelevant.

To exacerbate the problem with that equation further - you get credit for rent that will offset some of that debt. 

Annualized Total Return means that your total return equates to X% per year.

NOI and cap rates etc... are not part of the equation.  

But, price is only half the equation.

For help running numbers-https://www.biggerpockets.com/renewsblog/2013/01/1...Then once you have those equations, run them on various properties you look at.