Quick look at a potential deal

[Joshua Curtis]

Hi BP, 

I'm not sure if this is the correct spot for this inquiry, so if not feel free to move. Short story is by way of marketing, I've come up with a hot lead on a deal in my market. I'd love advice, as this is my first potential Lease Option/Subject To deal of which I've been a part. 

This is an absentee owner that has been renting the house for a couple of years now and is tired of chasing the tenants for rent. So, one stipulation is that I would need to kick out the current tenants (there is no active lease). 

3/2. Needs a face-lift (flooring, paint, etc.) but not necessary for livability. Needs new siding (also not necessary for livability). 

Appraisal: $130,000

Tax Value: $124,000

Mortgage Owed: $109,000

No back payments, back taxes or leins on the property. 

Monthly Payment: $845

Market Rent: ~$1,200 in good condition

The seller wants to walk away with $7,500 as a down-payment. That's a bit high for me, but that's the beginning of the negotiation. 

What would you all suggest? What other information do I/you need to suggest? I