I observed no standing water in the drain field of other signs of distress.

So I stand by my point of the risk being reduced with more units.

There are a couple things that stand out in your spreadsheet.  

I can't stand knowing I'm doing business with a liar.

One thing that stands out from looking at your numbers, your monthly expenses seems low, although I don't know the exact neighborhood you're in.

I asked him if Mr B knows about this deal and Mr B does not which obviously concerns me but I can understand where MR A is coming from because he stands to lose all he has paid into the contract and then Mr B has just made 1 years worth of profit and can start the land contract all over with another buyer. 

Our initial plan was to take the cash flow from the rental and put it to paying off the mortgage, and make our own monthly contributions of $1000 a month, even if it's above our mortgage, again to pay it down faster.I realize paying off the loans gives us less leverage and would take a lot longer to buy more properties, but my husband can't stand even "good debt" so we'd rather pay that off first.I would appreciate any words of wisdom/advice.  

That means if you can offer in that range of list price so they NET after commissions etc.. than you stand a good chance to get the deal barring you are not going highest and best with multiple offers. 

@David FrolYou're definitely standing on the line between right and wrong in this situation.

My reasoning for this is two fold.