Family member financing down payment. Appropriate return?

[Austin Jones]

I'm looking into buying a student rental property.  I have a family member offering to front me the $25,000 down payment.  I have the money in savings, but also have a young family and this feels like a good opportunity to leverage.  I'm curious how you guys would structure this transaction.  My initial thought is:

7-10% annual dividend plus lump sum repayment of principal in 3 years.  

Obviously the property won't cash flow enough to cover this principal repayment in 3 years, but it does give me a chance to extend the savings window to get into the REI game while taking advantage of a generous offer while it's in front of me. To reiterate, I do have the money saved up and worse case scenario could pull it out to repay him.

Is there any reason to not do this?  Is 7-10% too generous of an offer? I'm open to all options!

Thanks!