They've given different options and all to their benefit mostly.

It mitigates the risk because you can go slow, you are living in the property, and you get the tailwind of 2+ years of market appreciation while waiting to sell tax free on the gains.

From this CT information, it looks like it is an offset against your capital gains from other property, so you would have to find investors with significant capital gains and/or have them yourself. 

I'm no tax pro but I don't think the debt really matters, you will still pay capital gains. 

For holding vs. flipping, let your goals and market conditions guide you—flipping can build quick capital, but holding offers long-term gains.

Also, the owner expressed concerns over the capital gains tax early in the discussion...so I am thinking the opportunity to do vendor financing will help me get a good purchase price and help the vendor with taxes.  

|The gain that you have is ikely passive.

As others have stated, it's tough to lose the various benefits (health insurance, 401k employer match, etc), not to mention the income itself. 

Plenty of resources here to get familiar with to gain insight on your REI journey. 

We did live in the house for 2 of the last 5 years, so we wouldn't have to pay capital gains tax.