3% down on a 12 unit land contract, but no inspection til signed?

[Stephen Richardson]

I'm working on a deal for a small 12 unit apartment property. Units are 1bd/1ba 500sq ft. Avg rent is $420. Cash flows $1800/mo at 100% capacity. Seller is an upstanding member of the community with 400 units and growing. We've verbally agreed on a purchase price, a down payment of 3%, and a balloon in 45 months. He had his attorney write up the contract. His agent showed me 3 units. The contract allows for an inspection, but does not give the purchaser an exit from the contract should the inspection be unsatisfactory. I understand my position is not strong in this deal and should the inspection come out well, I'll be walking away with a good deal. However, I'm reluctant to sign on a property without having an exit route should I uncover more repairs than I'm ready to handle. 

Are my expectations set too high for the contract to have a "pending an agreeable inspection" clause? 

[Jay Hinrichs]

OK  if I am reading this right he wants the 3% down payment paid up front none refundable.

normally that would be couched as EMD .. subject to inspections.

he owns 400 units you own how many ?  playing devils advocate this screams of someone unloading a property they don't like for various reasons.. tenant base.. property condition.. etc etc.

and sucking you into giving him 3% up front and you lose it if you don't close.. wonder how many 3% he has gotten from others :)