Send them a termination agreement and get it signed and carry on.

While this can have a positive effect on making sure the outcome is as anticipated, it is by no means a cure all for the land contract/contract for deed short comings.The land contract was originally used to convince a seller to sell with a small down payment and carry back a note by providing a seller with the ability to get the property back in case of default without going through the time, expense, and hassle of a foreclosure.

If he doesn't have a signed lease the old lease should carry over month to month. 

Conversions carry extra baggage which you should be very aware of.

The other 2 option, provided there is a strategic reason to over pay would be to have the seller carry back that part of the loan for favorable terms to you as a buyer.Time is the best solution of this, it is better to walk away from a deal than over pay IMHO. 

Lender (Owner Carry) rolled entire amount (including down) into loan once the roof was discovered to have potential problems.

Has the building ever flooded before, is that why you are carrying flood insurance if it isn’t in a flood zone?

That’s not to say I still don’t carry additional legal fees but I would not carry as much.

I found an owner operator of a trailer park who is 83 and willing to carry the loan for 3 years. 

But it seems like these associated repairs could easily get carried away and spend more than you planned.