They wouldn't be able to get a mortgage, but would have to do some kind of SBA loan or other commercial loan for the business with the properties as part of the business.

You would be 100% leveraged, and you'd have 2 separate loans (One HELOC and traditional mortgage).

Starting with small multifamily properties 2-4 units is a solid move, plus if one unit is vacant, the other can help cover the mortgage.

The quick short answer in my opinion is this: If you want growth stick to the small multis that you know and once the mortgages are paid off retire fully.

If the property is not cash flowing and is due to your mortgage carry, it will most likely require a cash buyer to work (or close to it). 

The current owner is letting me take over the property as a tenant as long as I pay the water bill and the mortgage payment on it and whenever I decide I can purchase property for the balance of the mortgage  they are in no hurry for me to purchase the home as long as the mortgage is paid. 

I am scared of servicing two mortgages in the case of a vacancy.

This property is gonna cash flow over $1000 a month after we're all said and done with utilities mortgage and more.

It is increasingly more difficult to pay of even one mortgage when you are cashflow negative, let alone multiple.

pays your mortgage while you make Cash-Flow on those properties that you have under your name that pays you a higher ROI every Year.