@Gabriel Graumann actually this is a multi unit property where there are 2 parcels (2 building adjacent to each other 4 units on both sides).we are working with a lender who has agreed to do a conventional loan as it has only 4 units on each side (so 2 applications) - lets see how things go.

I will not be able to do a cashout refi with a conventional lender for 12 months, and although Fannie and Freddie require a 12 month seasoning period for cashout refi's, it seems most convetional lenders, even in a straight out refinance (with no cash out) require 12 months as a policy.Does anyone have any recommendations for long term lenders that will balloon me out on a long term loan?

So it's a conventional owner occupied loan with 20% down.

Rates for seller financing are typically higher than conventional mortgage rates to compensate for the increased risk.

I think one of the key things here is that is the lender primarily one focused on conventional/owner-occupied agency loans and just dabbling with investment property loans in a challenging market or a truly 100% focused investment-property lender. 

You would have to refi your FHA into conventional on the one you live in now, which would probably work and you could be at a better rate also.

I could do an all cash, but would prefer to do a conventional loan.

Financing options include conventional loans, FHA loans, portfolio lenders, and private financing.

The goal is to get the property or borrower prepared for conventional financing. 

You can also look into a cash out bridge loan at 80% LTV if the goal is to refinance into a conventional mortgage.