You have hit the nail squarely on the head. Your thinking and your attitude are both "right on." I would like to add a few little "deal beyond the deal".

1.) If you can get collateral for the down payment note, it would make things even better. Hold the title to their car, boat or Harley.
2.) Secure the down payment note ever more. Get a strong cosignor, e.g. their parents.
3.) Do things to get them to "satisfy" (pay off) the note early. "Ask them at tax-refund time" is a good thing to add to your "to do" list.
4.) As them to pay a little "extra" toward the principal.
5.) Offer to "cancel" the note, if they agree to refinance. In this case, they would cash you out of the whole deal by exercising their option-to-buy early. A great way to use this down payment note...as an incentive.This could easily be your modus operandi from the very beginnning.

There is more, (I could go on for days) but you get the idea. This is your King's "deal beyond-the-deal" thinking. Transaction Engineers (TEs) must be constantly "massaging" or at least thinking about the "deal-beyond-the-deal."

The King