Seller financing on land purchase - ideas for constructing offer

[Mariah Smith]

I am looking at purchasing a 12.4 acre lot near Southern Pines / Pinehurst NC.  The land is 'horse country' and the lot is particularly desirable because of its close proximity to a 5,000 acre land foundation dedicated to horseback riding and horse events.  I have owned two SF rental properties in this area and houses here rent well because of the appeal of the town of Southern Pines and the proximity to a large military base. 

The seller is open to financing the sale as they own the land outright and would consider as little as 10% down. The total sale price is $245,000.  My plan is to construct a modest 3 bed 2 bath home on a corner of the property that would generate rental income over the years (I have a separate funding plan for construction - private loan from family). Eventually, many years from now, I could make it my retirement home/ horse farm or I could sell the property. 

This is the first time I have tried seller financing as a buyer and I would like to construct a well thought out offer.  Would like to hear your thoughts on my proposed plan as well as if you have recommendations on how to improve it. I have a real estate attorney who will review my offer to the seller.

My thoughts on possible initial offer to seller: 

- Down payment of 10%. (I can negotiate up from this up to 20% but want to keep down payment as low as possible to not use all avail cash)

- Rate of 3.5% on a 30 year loan amortization schedule. Is this rate realistic for seller financing?

- Balloon payment of balance due in 5 years with option to extend due date of balloon payment in 1 year intervals if both parties agree.

This would be a $24,500 downpayment to seller. I used an online amortization calculator, if my math is right payments would be $990 a month. At the end of 5 years the seller would have received $36,691 in interest and I would have reduced the principle by $22,718 and would owe $197,782 as a balloon payment.

Thank you for any advice!  This is my first time posting but I have been reading and lurking here for several months and have learned a great deal from all of you. I realize this isn't an undervalued deal - this acreage is selling at the correct market price and the seller isn't overly motivated, they are just getting older and own another home and do not have plans to use the land. I also realize this deal won't generate cash income for me but its a way to partially pay for a piece of well located land I may want for my own use 20 years from now.

[Mariah Smith]

Thank you everyone for the advice and discussion. I am excited to report the seller and I agreed to the following offer and we are under contract:
$225,000 offer (original asking price was $245K)
$25,000 down payment
4.5% amortized at 30 years
Balloon payment due in 5 years.