C- Class Property Renting for $800 Per Month , SFR Property in decent shape needs minor repairs ( maybe 2-3K) - 60,00K Asking Price Option 1: 25K Cash offer close within 7 days ( I can do a cash out refinance and pull all the money out) Option 2: Seller Finance – Purchase Price 60K- 0 Down Payment, 30 year amortization, 15 Year Balloon ( Balloon Payment $34,685.10) @2% interest ($14,382 interest to be paid over time) 221.77 Payment per Month.

If I am not financing any portion of it, I won't have any monthly payments.

If you are making all of the payments, that is typically all the bank cares about. 

Besides, for college aid, it may look strange that I pay mortgage but don't own the house.My fiancé could also buy the house from me, but he doesn't have enough money for a 20% down payment.

But when I do my projections, I always assume the increase in Expenses will be higher than the increases in Rents.Therefore, in my particular calculations, it is always very conservative.Also note that even if my Mortgage payment throws me negative in the 1st year and EVEN if the Expense Increases are higher than my Gross Rent Increases, I will still get increasing cash flow.Given this scenario, you will not that I start out NEGATIVE $133 per month but wind up POSTIVE $1,684 per month.AMAZING when you do the 10 year projections and doubly amazing when you actually put it in practice over 10 years.Keep in mind this is COMPLETELY COUNTER-INTUITIVE and yet it's all about the Math.Again, most people (probably 90% or more) will not realize the effects of this until they do the Math.......

If it were me, I would take that $325k and roll it into a little portfolio of cash flow props by taking out additional leverage and using the $200k equity as down payments.

Instead of residential real estate, would a savvy investor look to commercial property, self-storage, land development, all of the above in this situation?

The loan for the down payment and for the renovations is coming from a family member.

I'm hesitant to let go of that, but selling would free up a decent amount of equity (in our market, I know 25k isn't much in most areas) to make a decent down payment on another multi-family, which is what we ultimately want to do with our REI careers.  

(this is important if you do need a short term loan to purchase then refinance out - and the answer should be 1 day...very important that it is 1 day on title is all that is needed to refinance) What is my minimum down payment required?