If you finance using a 5 to 10 year piece of paper you could lose the property because the price went down at the wrong time or didn't go up.

Not to mention the previous owner was most likely using a property manger and has no idea how things work.

I recommend using a the HOLD spreadsheet: https://www.kellerink.com/resources/Easily lets you plug in the numbers and track cashflows and ROI.

Is there any benefit in using a local lender as opposed to a realtivly national one?

. $100 in 1995 is worth $166 now using a cost of living calculator.

(comps are showing about $500k), if he agrees to finance the house to me using a wraparound mortgage.Although I have $0 down, he is seeing these benefits:Receiving full retail price for a house that would probably sell under retail under a traditional saleI will cover all closing costsHe does not have to pay a real estate agent to list and sell the house (3% savings right away)He's saving at least 2 months of vacancy ($2600/mo) compared to if he were to sell the house by listing it with an agent, or attempting to find a new rental tenet.He's saving any money he'd have to spend to list and market the property for sale or rentWith the wrap mortgage, he will actually receive more than the sale price because I will pay interest each month in addition to the principal payment.With tax and insurance included (there is no HOA or Mello Roos) if I continued paying the $2600/mo he'd see a little over 2% in interest, would be freed of any obligation to the home, and would still enjoy some nice cashflow until I could refinance and cash him out.I'd be open to his terms if he wanted to put a clause in the contract requiring me to cash out within 3-5 years, although I'd of course prefer if he didn't.Does anyone here have any experience in a deal like this? 

Purchase price: $74,500 Cash invested: $2,000 Townhouse Purchase price: $74,500.00Cash invested: $2,000.00Monthly cashflow: $305.00Purchased using a $0 down VA loan at 3.6% interest.Rents for $950/month on a year to year leaseARV $75,000Utilizing property manager for 7% of the rent What made you interested in investing in this type of deal?

@Randy Wiley Using a HELOC to get started in rentals is very common. 

Turns out I bought the property CHEAP (Thanks Bigger Pockets) and using a 5 Cap rate I stand to take $500k out of the property and completely pay off my HELOC. 

@Jacklin Jackson some quick tips here for you:If you are using a Fannie Mae or Freddie Mac type of loan (if you recognize those names) then your personal income and your personal debts matter.