Bank Open to Contract for Deed. Enticing them with Terms?

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I've put in a verbal offer on a duplex in a small Midwest city. It is a pre-foreclosure and recently dropped in price by 25%. It has some potential foundation issues that have scared people away, but at the lower price it's gaining a lot of interest. The realtor I'm working with has been in discussions with the bank and not with the seller. It seems that the seller just wants to be free and get out with no long-term damage to credit. They also just want a little bit to move closer to family. They owe approximately $50k and the bank says they need close to $60k to cover all the fees and make everyone whole. they have received multiple offers. My realtor suggested a higher be offer to make the bank more willing to except a contract for deed. It is listed at $59,900. I'm considering offering $62k with $12k down and a payment of $600 to the bank, approximately $80 more than what the current seller is paying with the extra going towards the principal. And a three-year balloon on the rest. The numbers for cash flow ($150/unit) and cash on cash return (15+%) after expenses still work out very healthy. Have any of you ever done this sort of a deal that involves a bank negotiating a potential contract for deed?

Update: I just docusigned a purchase agreement! The local bank that holds the current mortgage opted for an in house commercial loan instead! This keeps it off the radar of other lenders and doesn't disrupt my other deals. I'll get a better interest rate than the seller had. The realtor is confident that it will appraise for nearly $20K over purchase agreement price. It was listed as a 3BR/2B duplex. I assumed a 2BR/1B and a 1BR/1B. I'm out of state and my sister did a video walk through. It actually is two 2BR/1B apartments. This increases combined rents from $1,300 to $1,500. AND the basement has a separate entrance, a full bath and a kitchenette! With some capital improvement, such as an egress window, leveling the floor, flooring and paint, we could make the basement a studio apartment and it could be a triplex! As a triplex it should bring in about $2,000 and my mortgage will be below $550. I have an investor who will cover my down payment and costs to make rent ready at 6% over 5 years. Using the rental calculator, even with this payment added and all other expenses calculated, I'll still clear over $200 per unit and my cash-on-cash will be phenomenal since I'll have almost none of my own money in the deal. I'll keep you updated as we move forward!