Seller to hold back 20% question

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Found a house through a realtor. Would like to know if these numbers work or not. The house is listed at $63,900. Seller is willing to hold back 20%. It's a 2 br prefab that is in good shape compared to the others in the area. There are lots af these in town, several listed from $65k to $69k, but not many selling. I would like to purchase and rent out. Rents on these (2br prefabs) run between $525 and $575. Taxes are $720/yr and insurance will be $360/yr.
How would you approach this? If I offer $63,900 and take the 20% offer the numbers look like this, which I don't think would be worth it.
Payment on $51,[email protected]%/30yrs = $313 (80%)
Payment on $12780@7%/15yrs = $115 (20%)
Taxes and Ins. = $ 90
Total = $518

The property is ready to rent, as all the cosmetic items have been done, and the seller is offering an appliance warrantee(I think the owner is an investor). Additional fixing to get it ready to rent would be under $500(new stove and bathroom fixtures). Considering closing/advertising/holding costs, etc., how much would I offer and how is the best way to approach this situation as the seller is willing to be somewhat flexible. Wish the realtor wasn't involved, and I could talk directly to the seller.

On another subject, I hear about people doing lots of deals, I have been "looking" for several months and have only done one deal(I purchased and rented out a Fannie Mae 1br). Seems to be lots of properties for sale but so many of them are not a "good deal" and I'm forced to pass on them. What is the ratio of looking vs actually purchasing? By the way this is a great forum, thanks in advance for the feedback.

Mike in Washington State.