Owner finance question,does this sound like a good deal?

Question

The owners property is selling for around $279,000.And he might be interested in financing for me at 100%.What type of interest rate should i offer? at 5% at 30 years he would get a little over $2,000 dollars a month.He is already recieving about $1,900 a month in rent from one of the on property apt's.There is two more vacant apt's to be rented out,that would generate even more income.Should i offer more then 5%? what would make an attractive first offer to this owner? where should i START the bargaining?

Answer 1

I would ask him to tell me what HE wants, rather than telling him what you want to pay. That way, you know the maximum that it will cost you. From what you have stated, assuming that the apartments are in rentable condition, it would be an excellent buy with zero down 5%. Make sure that the property is valued fairly, and get an inspection completed. 5% interest rate with nothing down is a very low rate. I would be prepared to go to 8% without hesitation. Let him show HIS hand first!