I'll get to that shortly, but once renovated:2 studios @ $425 p/m = $850 (but just call it $425, because I'll live in one of these).Asking price: $79,900What I want to offer and how I want to propose it:Offer: 70k, 3k earnest money, seller carries 12k for 3 year term at 3%.Renovation (this is fairly crude until I walk through with a good friend of mine who has been at this a while): 40k - I would also hope to save on some of this by doing much of that myself.

I'll get to that shortly, but once renovated:2 studios @ $425 p/m = $850 (but just call it $425, because I'll live in one of these).Asking price: $79,900What I want to offer and how I want to propose it:Offer: 70k, 3k earnest money, seller carries 12k for 3 year term at 3%.Renovation (this is fairly crude until I walk through with a good friend of mine who has been at this a while): 40k - I would also hope to save on some of this by doing much of that myself.

In other words, I'm buying a 4-unit and proposed raising the purchase price 6% to cover 6% of my closing costs.

I remember coming to work, before I had kids, with a massive new proposal that I had created over Christmas break.

Balloons represent a huge risk for you obviously.Are they proposing a Note and DofT or RE Contract? 

I suspect REI are likely to find that my proposed method of starting small but gradually increasing each month in a way that rent increases more than cover it will be far more manageable. 

If they think there is a problem with what you are  proposing they are likely to be correct.

From the property inspection and proposed construction scope you can assemble a budget of what could possibly go wrong with a property over the next five years.  

My question is, what should I propose to the investors in return for lending me money?  

While you are at it, look up RICO and realize what you are proposing fits the definition.