Need help structuring an attractive and reasonable seller financing offet
Hey guys,

So I am interested in this property(18 unit complex) , but I only have $166k left from my 1031. 

The asking price is $1.25m. I would like to put the remainder of my $166k down , no more, and seller finance the rest. What are some structures I could put out that’s reasonable and attractive. 

I will be looking at this property for pure Long term cash flow(20+ years minimum), so owning it or selling it immediately isn’t a concern for me.

Edit: seller is open to seller financing
[{"id": "h0dudzc", "text": "The first question is whether the seller will entertain seller financing.", "replies": [{"id": "h0duxsy", "text": "Yes, adjusted post.", "replies": [], "depth": 2}], "depth": 1}, {"id": "h0dzro5", "text": "First option would be asking your commercial lender if they would be willing to provide a 70-75% ltv bank loan with a subordinated seller carryback. This might give you the best rates and terms through the bank and the seller as it puts a large portion of cash into the sellers pocket. If your banker isn\u2019t able to accommodate that option then you need to work with the seller on what terms they will offer. Try for a 5 year term, 4%, and 25 year amortization. They might turn that down but it\u2019s a starting point. The intention would be for you to reduce the debt and/or increase the property value to pay the seller loan off in his timeframe. Since 1031 exchanges might go away the first option might be best if the seller is going to use an exchange.", "replies": [], "depth": 1}, {"id": "h0e0gv6", "text": "Light downpayment but def doable. Find out the reason for selling. If it\u2019s a good property It\u2019s more about selling yourself to the seller then anything. Have your shit in order and know what you\u2019re talking about. Sell yourself and give him the extra .5% on interest.", "replies": [{"id": "h0eyhdw", "text": "Taking in consideration that (some) RE finance professionals discourage deals with sellers financing component, what are available alternatives to close a deal like this where we are aiming for a minimum down-payment ?", "replies": [{"id": "h0hqrw6", "text": "If it\u2019s cash flow positive on paper I\u2019d probably look into a local bank first but it would have to service debt. \nNext would be a hard money loan, most require 20% though. 75% looks much more attractive to a lender then 85%. I\u2019d really push the seller on holding another 12 or so percent with attractive terms. Just need to be confident and come correct with the terms. I\u2019d offer 6.5% with a 4 year balloon. This is one of the only cases I\u2019d advise against starting low. \nHaving a good relationship with a local bank works wonders and they\u2019ll push deals through for you that others wouldn\u2019t even entertain. Tips for that are being confident, bringing them strong properties, and getting them requested docs on time.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "h0e7vip", "text": "Are you doing any value add to it?  If you are able to refi the seller financing out in a reasonable timeframe you can give them a favorable interest rate on IO basis (even deferring payments if senior lender is flexible on it).  Senior lender might be willing to do the refi to take them out.", "replies": [], "depth": 1}, {"id": "h0e9otg", "text": "What about $1.6PP and you put 10% down?", "replies": [], "depth": 1}, {"id": "h0ghhg0", "text": "Commenting to follow this post; I\u2019m considering similar deal.", "replies": [], "depth": 1}, {"id": "h0i3l8p", "text": "Find out seller's current yield on the property, then try to offer 25-50 bps as spread. It is better off for the seller as his/her return is higher plus debt is more secure than equity. And if you screw up(hope not), he/she will have the property back.  \n\nAlso use your local bank's rate on similar property as reference/benchmark\n\nGood luck!", "replies": [], "depth": 1}, {"id": "h0i5dng", "text": "13% down seems extremely light. Is the seller open to carrying a note at 87%LTV? Will the rents you will be receiving cover your monthly payments? \n\nUsually, on a seller carry, the seller is benefitting by either getting a higher price than appraised value on the property  or is getting a higher return on the interest rate of the loan. You usually aren't going to make out on both sides of the deal (price and rate). We were working on a deal in CA and the seller agreed to 4.5% carry rate on the LOI but then bumped it to 7% after speaking with his CPA.\n\n I would suggest asking the seller what rate and term they are \"thinking\" and then see if that is something you want to negotiate further or not. They may \"mention\" a rate that will surprise and benefit you.", "replies": [], "depth": 1}, {"id": "h4ofxor", "text": "We could honestly maybe do a HUD loan. 35 year fixed, 80% LTV , non recourse. Let me know if interested", "replies": [], "depth": 1}]