seller carry back to purchase another property?

[CD Jones]

Need a double check on this idea...

I have a guy who wants to sell me his 4 unit building for $325k, it cash flows $40,000 per year and is on seperate water meters so tennants pay water..owner only pays for trash. It costs me 20% down payment plus closing costs to purchase this (appx $70,000). At closing the owner is willing to loan me thru a Note to him $75,000 at 3.9% over 36 months. It would be a balloon payment with the monthly payment amortized over 30 year loan (appx $350 per month) and I would pay him the balance of the balloon by the 36th month. I plan to pay the balloon off with my current cash flow over the 3 years. I would take the loan he would give me and buy another 4 unit I am also looking at for $220k that cash flows $31,000 per year. This seller carry back loan would give me the down payment and then some for the down payment on the second 4 unit building. Please double check my thinking...I can repay him the note over 36 months no problem out of my main cash flow no problem. I currently have 11 units and am trying to leverage up to 50 units over the next few years and was thinking this would add 8 units pretty quickly. Thoughts?

Thank you for any critiques!