creative financing question

[Nicholas Spohn]

So I am stripping linoleum tile adhesive off of beautiful wood floors (yeah people are stupid) getting my rental property ready to rent and listening to the latest BP podcast on creative financing and got an idea and would like some ideas on structuring this deal.

So awhile ago I was looking at a beautiful old house right on a main street across from a park, 3/1 with a 2 car detached originally listed at 109 k. Never met with the sellers on price (not even close). Well, a friend ended up buying it for 95k after 8 months on the MLS, it should rent for $1200 easy. She hired a terrible property manager, its been vacant since thanksgiving she now has a listed at 110? and just wants to get rid of it.

I have college students fighting over the house I am working on now and could put 3 of them in this house probably on a 2 year lease with 2400 security deposit.

Possible deal structure; $5,000 downpayment on lease option for a purchase at 90k in 5 years. I pay her mortgage over that time, she gets to write off depreciation and capture the equity. I get 1200/month in rent for 5 years, with 2400 back in security deposit. After 5 years I get to buy at 90k? Its her first home and she has a good job so presumably a good interest rate and terms. Is there enough margin in here for me? I would never pay that much for a conventional deal, but using her financing and a low downpayment might make sense. Would she go for it? Thanks! and great podcast.