What's your opinion on this contract for deed deal?

[Mark Boek]

I've been speaking with an owner here in the KC, Mo area regarding a SFR he's interested in selling. He's not behind on payments and he doesn't like the risk of a subject-to purchase. He is willing to do a contract for deed with the balance due in 3 years. My payments would just be enough to cover his mortgage pmt.
He's ok with having payments disbursed through a 3rd party so I can be assured that mortgage payments are made.
He just put a tenant in on a 12 mo. lease.
After all expenses, including management and maintenance, cashflow is slightly negative. If I take on management and maintenance myself, I can get a positive cash flow.
Normally I would say there's not much profit here, if any. However, here's what's appealing to me and what my exit strategy would be:
This is a nothing down deal - I have no investment at risk except my time.
Option 1. I'll approach the current tenant and see if they want to have an option to purchase the property. If so, they will be responsible for maintenance.

Option 2. At end of 12 month lease I will offer for rent on a lease Option with an 18 month term.

Option 3. If Option is not exercised before 3 years, I will take out a loan for the remaining balance or assign the contract to another investor

Current balance on loan is 54,000. Comparable homes currently look to be in the 60-65K range. If I Leas/Option I'll ask 70-75K.

Is there anything I'm missing or does this look like a good nothing down deal?

As I see it. worst case scenario is I'm not able to secure financing in 3 years and he takes the property back. In the meantime, Rent should be able to be increased $50-100 after the first 12 months, providing an increased cash flow.

He has other houses he would like to sell, as he wants to focus more on his commercial properties. Even if this is borderline I believe it may help open the door for some of these other properties that could be purchased more profitably.

So, would you take it or leave it?

Thanks,
Mark