More seller-friendly seller-finance deal: Would you take it?

I’m representing a seller on a small multifamily, and we got a pretty awful seller-financing offer: almost no meaningful cash up front, 0% interest, very low monthly payments for decades (their children would end up collecting, lol), and the seller still transfers title. 

So I’ve been trying to think through what a more realistic counter would look like that protects the seller but might still appeal to an investor. There really was nothing for the seller. 

I'm familiar with the basics of seller-financing, but it's not something I have experience with, and if we move forward, I plan to consult an attorney at a title company who does this work.

Here’s the fictionalized numbers and rough counter structure I’ve been considering:

Purchase price: $195,000
Cash at closing: $25,500
Seller carryback: $169,500
Interest rate: 2.5% fixed
Monthly payment: $1,450
Balloon after 60 months: about $100,060
Grand total paid: about $212,560

The catch is the property still probably needs $30k-$40k in rehab if you want it to get the top of the market rents. But, the ARV is about $250,000 and after 5 years it could be worth $290,000. 

From the seller side, this feels way more reasonable than the offer we got. From the buyer side, though, I’m wondering if this still just feels too tight to be attractive.

If you were the investor looking at this, would this be a deal worth pursuing, or does the combination of rehab + current rents make even these seller-financing terms a hard-pass?

I could see my seller lowering the price even further to make the deal more attractive.