Considering an installment sale - seeking counsel

[LadyMaWhiskers]

I need some reading recommendations and information about the pros/cons for me as a seller contemplating seller-financing of a multi-family property.

Some details

Location: California

Loan terms: TBD, maybe interest only to start or maybe fully amortizing from the start, with some kind of balloon, in the 5-10 year mark ??; IDK, this is partly why I ask for reading materials, I don't know what the pros and cons of the options are

Current financial situation: $125k salary, passive income ~$50k (mostly unrealized), filing Head of Household (these figures don't include the current rental income or any future interest/principal repayment income)

Future financial situation: similar, no plan to quit working imminently

Motivation: looking at options that lower my responsibility to maintain a large property and keep hefty cash reserves for it; would like to take some cash out of the multi-family to pay off my mortgage on my primary residence (but not by shifting the debt to the rental, capsize?)

Dear internet strangers, what would you do?

[MDM]

Much depends on "TBD" in

Loan terms: TBD, maybe interest only to start or maybe fully amortizing from the start, with some kind of balloon, in the 5-10 year mark

If you can get a high enough (up to you...) interest rate, this could be a good bond-like investment.  Yes, a 5-10 year balloon would provide some protection against high inflation.

[Seeking the Brass Ring]

I don't think there's enough detail here to say if it's a good idea or not.  Try to step back and look from a 'macro' viewpoint.  What are your goals?  Does this sale help you get closer to them?  Why do a seller finance instead of an outright sale?

[tonysemail]

In case you haven't already seen it, I found this thread informative.
http://forum.mrmoneymustache.com/real-estate-and-landlording/has-anyone-used-a-structured-sale-to-minimized-the-taxes-on-a-property-sale/

[Goldielocks]

Rent to own (single family) are usually good bets in markets where the buyers are slim and the innovative structure is helpful.  (e.g., a rural farm property).

The bonus for the owner is that these are structured so that you retain ownership, and just build a "credit" account towards the purchase price.  If defaulted you keep some or all of the credit account.  (e.g., the new buyer pays rent plus a principal amount to the credit account).

So, the risk is a falling market where the buyer walks away, or a lot of damage to the property (like the risk with a a renter) but you have more $'s to hold.