All plans could be stronger, or refined.

I could close with cash, if needed, but would prefer not to tie up all the cash and have to pay for two full closings...

It makes a smaller monthly note, but ties up more capital.

Try not to tie up your purchasing power on this deal.

Initial question that comes to mind is how they can obtain down payment to buy a new house given their equity is tied up in their current house.

Indy and KC are top 50 markets with stable populations and employment not tied to one or two large employers. 

Agreed, since you inherited the tenants I assume you have no ties to them, so you don't have a reason to give such a huge discount every month.  

So let's say I have 10 leads willing to do seller carry-back sales this year, all at different rates (do they need to be tied to an index if each individual seller is only doing 1 sale?)

In researching, it seems that all it takes to make them bank finance-able is to tie them to a simple foundation.

Since we don't want to tie-up our money for very long, we thought we could turn-around and do a cash-out refi.