If they specifically need to cash-out to buy another home than seller financing is often DOA.As mentioned, if the have a balance on their underlying mortage- If they want to pay it off it might require a big downpayment- It is possible to leave it in place with a Wrap but that is an advanced strategy and while fairly low risk, the due on sales clause is a concern.On interest rate, my experience is that a seller finance buyer usually has to pay a few points above the going interest rate for conventional/FHA lending so probably closer to 7% these days although it never hurts to ask for lower...All of this is theoretical so the advice to chat with seller to get more information is the right next step.Jeff

If you purchase a quad and live in one unit, you will never be lower than 25% and most likely will be 75-100% most of the time.Using the cash to qualify for loans on the new property means you would probably only need 25-35% down including closing costs.

They will go max $100k or 70% LTV whichever is lower.

My area of uncertainty has to do with the lower quality property in a lower income neighborhood.

But if I can guess here a little...FHA loan will have a significantly lower down payment for a multi-family unit - 3.5% down.  

Rent increases are based on market comps and if the rent currently is more than the market comp it can be lower.

Kyle Winston are you able to/would you want to partner with anyone who may be able to give you a larger portion of a down payment to lower the payments and find a way to split the equity given that you will be paying a portion of the rent?

It also lowers my risk and gives me more options.

As long as the maintenance was taken care of within a reasonable time frame and complied with landlord laws then you should never lower the rent or take partial payments.

If I can get a 40 year, I would take that.There are two factors here with regard to my cost and income:1 - Down Payment - The lower the better.