lower down payment vs. lower price & rate, what should I go for?

[Wang Windy]

Hi BP friends, I have a situation here and I would like to get your opinion on this: 

I am negotiating on a property with a seller in the Central Valley.  After a few rounds of negotiation, the seller gave me 3 choices: 

1. 450k purchase price, put 300k down, and the seller finances the rest at a 5% interest rate for 10 years. I have tried negotiating on a lower down payment with 450k, but the seller needs 300k for a 1031 exchange.

2. 470k with 50% down payment and the seller finances the rest with 10yr 5%

3. 470k purchase price, with a conventional loan (I am looking at 7.5% with 25% down 30-year fixed for investment). 

The property is an SFH but converted into 3 separate units and currently renting at above-market rent to daycare. According to the number provided by the seller, I will be cash-flowing either way, but around 1k more with option 1. Essentially my question would be: should I put more cash down (around 80% of all my cash reserve) and lose the opportunity to buy in another area (hopefully a primary in the Bay area and house hack) in the near term for a lower purchase price and interest rate?

Alternatively, I can walk away and use my cash to invest in a fixer house in the bay at a B to B+ location but probably need to put all my cash in for down payment and rehab. Hopefully I can rent out 2 rooms to help with mortgage but I will still have a negative dscr in this scenario.

Would love if you can share your thoughts here!