Owner Financed deal.... Too good to be true?

[Jesse Andrews]

Hi Everybody-

I'm brand new to the real estate investment scene... but have certainly done my homework over the past year.

Recently I have spoken with an owner regarding an owner financed deal. These are the basics:

6 unit building, all are 1 bed 1 bath units.
4 units rent at $600
2 units rent at $625
4 leases signed until may 2013
2 units month to month.

all 6 furnaces natural gas, all 4 years old
all 6 water heaters 5 years old
all windows new
roof 9 years old
siding great
driveway pavement 8 years old
all units individually metered for gas and electricity.
all up to Rhode island fire code with pull handles and hard-wired to Fire Department
as a bonus, an outbuilding is on site used for tenants' storage.

The neighborhood is great. Good schools, mainly families, and LOW crime.

House was listed for 340k... i can probably get him to 300-310.
Appraisal done last year by valued at 390k (i know, i know i'm not going to trust that 100%, i'll have my own appraisal done)

He is looking for 20% down, and will finance the remainder at 4% interest over 20 years.

I'll probably try to get a loan for the 60-68k down payment. My credit is OK 680ish

He owns the property free and clear. He's 73 years old, and wants to cash out and travel with his wife before they're too old. basically, he likes me and wants to extend this credit.

From my calculations (including ACTUAL taxes, water bill, sewer bill, fire code testing, insurance) and figuring in vacancy fees.... im looking at 32k NOI

after debt service, im somewhere around 11k cash flow

keep in mind the market rents are closer to $675-700

What do you think?