Play in your own backyard.

You should be able to say that you demand your own personal representation. 

You can somewhat 'play' with that scenario by upping your appreciation input, but to me that is gambling if you push it too high. 

Get into another 30 yr 3.5-4.5 % interest loan with 3.5% down payment..... and you still have probably over 150k to play with on an investment property purchase.

I think the best play is to go conventional at 70% LTV, refi after 1.5-2 years and go CMHC for long term.What are your thoughts?

During the last correction we saw rents go up not down as more people choose rent over ownership the demand for rentals increased. 

Otherwise you would be playing a "slow mans game" if you only focused on cash flow.

Sounds like you got a gem, the better play would be to BRRRR and hold it.

More and more listings are coming on the market every day, for two reasons: 1) sellers who bought before the crash have now seen some good appreciation and are able to sell for a small gain 2) older long time landlords are ready to retire and are looking to cash in on the high demand for this property class right now. 

sounds like you have a great opportunity. i recommend the contact for deed route. as you mentioned you can get a lower down and more flexible terms. if you can get a 10-12 year ballon payment you should have no problem refi'ing out prior to that with a conventional loan and pay off owner contract. i would try to get the per unit down. you could try to show the total amount you would be paying when you add interest into the equation and see if he will come down on asking price, at least to market if not below. as well as play up the continued cash for with zero management headaches. ultimately if it cashflows well and you have good fixed debt for 10 plus years my experiences has been that price per unit is less of a factor. cash flow is king.