My First Invest! Want 2nd Opinions! Creative Lease w/Option, CT

[Joshua Greenwald]

Hello all! I am so excited I think I have found a great first investment property. The seller is a serious "don't-wanter", and he's ready to leave it to me and move to the other coast of the country. I would like the collective input and wisdom of you, forum members, to test and prompt my further planning and pre-empting as I plan to write the contracts and do the transaction. Have I missed any questions and info from the seller? Is there an even better, safer, more lucrative way to structure the deal? 

Here are the details. There is a seller in my hometown, suburban CT, who is selling a single family with 3beds/1bath, about 1000sqft. He is asking $125K, he has a mortgage on it of 30 years at 5.125% and only approximately $2718 in current principal equity. The monthly payments are $943 including tax I believe. He refinanced a couple years ago which cashed him out of whatever original gain of equity he'd had since 2008. He owes $3761 to Home Depot for replaced windows. There are tenants currently residing and renting the property for $1200/mo, including all utilites save water/sewer, but this rent could certainly be increased some, which it hasn't in the several years he's been renting it out. The tenants obviously want to stay in the property since they make visitations difficult for prospective buyers.

I have very limited cash on hand, have been operating from a student and bootstrapped entrepreneur's budget, but I have come up with a possible creative proposal which I think the seller will be amenable. I am going to propose to him a Master Lease with Option to Purchase at my discretion within the remaining term of his mortgage. During the Master Lease term, I will have the right to collect all rents, the responsibility to maintain the property and pay all expenses and mortgage, as well as will have ownership and right to access and utilize the equity in the property as I see fit. As well, the seller will have assigned me all the bundle of rights to the property, essentially, while retaining titular ownership in legal name only. I will have the sole and exclusive right to purchase the property at any time of my choosing for the nominal amount of $1 from the seller and whatever arrangement I might make agreeable to satisfy the relevant creditor bank's remaining debt. In exchange, upon signing the lease I will pay the seller a consideration of his current equity $2718, which he can use along with his own funds to clear the remaining Home Depot debt. 

The seller seems agreeable. If he is, is this a good deal for me? Should I do it? Should I try to extract any further provisions? Thoughts? I shall make a decision asap this week.

Thank you for your consideration.