Any ideas on structuring this deal?

[Sharad M.]

Hello all-

How would you structure this deal?

2-plex listed for $89,900. Been on the market since Nov. 2009. Units are rented out for $595 and $550 per month. Tenants pay their own utilities. Owner pays for water/trash which is about $40/mo. The county website shows taxes of $1,800/year; however, this number is after Mortgage and 2 Homestead exemptions. I called the county this morning to find out how much the taxes would be without any exemptions, it would roughly be around $3,600/year.

The property is in a great neighborhood and passes both of Rich's tests:

1. I want my wife to be able to drive the neighborhood during the day
2. I want to be able to drive by at night.

The seller lives in Texas, and inherited the property in 2004. The seller is open to doing a land contract for about 5 years or so. Now, I want to structure the deal so that it comes out to be win-win for both the parties involved.

I was thinking of offering:

$5,000 down
$250/mo for 5 years
$40,000 lump-sum payment after 5 years

The total payments come out to $60,000.

However, present value of the above payments come out to about $47,500 calculated at 6% per year.

Given the above payment plan, can I word my offer as $60,000 paid $5,000 as down payment, $250/mo for 5 years and $40,000 at the end of 5 years. Does this sound like a good deal?