Potential Lease Option Deal - Looking for Feedback

[Jon Acosta]

I've approached the owner of a rental property in a B+ neighborhood asking for terms to purchase their home.

It's a 3 bed / 2 bath "move-in ready pretty house" that they've rented out for about 10 years.

Owner is asking $205K (I confirmed with a realtor that this is fair market value).
Rent is $1495/mo

I offered to pay their asking price if they held the mortgage for a period of time.

They came back with, "Sure, we'd definitely consider it. How long do you need the mortgage held? and what down payment can you make?"

MY STRATEGIES:

 1) Seller finance the deal with some attractive terms and then follow through, or turn around and sell the contract to a local investor in the metro Atlanta area (Georgia).

2) Create a sandwich lease option. (Put some money down and negotiate a lower rent for 3/5 years). THEN, turn around and lease option the home to a tenant/buyer with a higher option fee and higher rent. 

I'm pretty certain the owner still has a mortgage on the property, but will need to get details soon.

Before I present any offer to the seller, I figured I'd reach out to the community for advice.

What do you think? Any alternative strategies to consider here?