Possible owner-finance deal

[Jim Viens]

Got a call from a yellow letter today. Guy and his wife have lived in the house for 45 years (inherited from in-laws who were the original owners) and they own it free-and-clear. Property is a nice 3/1.5 raised-ranch on a quiet street. Comps in the area have been selling for around $85k but values are going up. The way he described the house it's been well-maintained and needs little work to be move-in-ready. Typically I'll refer deals like this to a realtor to sell at retail, but this one I'm thinking a little differently. What I'd like to do (once I actually view the property and get a good idea of the condition) is to offer around $70k but see if I can pick it up as a zero-down owner-finance. I'd propose they carry an interest-only note at 5%, 30-year amortization with a 3 to 5 year balloon. I would then do the needful to get it ready for tenants and rent it out for $900-$950/mo (would really like to do a 2 or 3 year lease-option). If I can work out the owner-finance part that would make my debt-service on the property about $300/mo and I should cash-flow about $150-200/mo on it. Could someone verify this for me to make sure I'm not missing something? I want to make sure my numbers are good before I even float this to the seller.

Thanks!