Interest rate: Your interest rate is XX% APR interest-only plus X points.

My question would be is a 6 cap the going rate in the area for that building.

If you're located in WI, check out Premier Point Realty and Homestead Realty....both offer the licensing course at a discount and some of the lowest fees/commission splits in our local market.

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

And you are looking at an interest rate around 7% instead of over 10%. 

We don’t have an immediate need for the cash and current rates are attractive, so would love to hear what the pro/cons of seller financing are in this situation?

I don't think you can say a place is doing "very well" when they're among the poorest cities in the US and has among the highest foreclosure rates in the country.

I guess they are holding you ultimately responsible for pricelabs raising rates.

@Loren Souers I'd have to run the specific scenarios with the rates and fees, but if you're OK with paying the higher closing costs, the Mortgage 1 deal looks good, particularly if you focus on CoC returns.

Being owner occupied means getting the lowest interest rate, and a conventional or fha loan.