It seems like we could get a down payment for a new, cheaper property and some passive income while also saving the buyer money. 

Yes, there is some gain. 

You will gain acquisition, project management, and property management experience.

While cash flow might be tighter, your equity gains over time could more than make up for it.It's also worth considering hybrid areas, neighborhoods that offer a balance of cash flow and appreciation potential.

You need an objective report by someone who has nothing to gain other that getting paidGoo luckGino

The most common benefits a landlord can get from an arbitrage agreement are: reduced vacancy expense, decreased maintenance costs (most arbitragers agree to fix any damage done by guests), increased rent (most pay a premium), reduced number of hours managing the property (aka it's more passive)Some less common benefits, but still worth mentioning: Using the property to host their own guests at a lower rate during the "vacation season", Revenue sharing, arbitrage managing landscaping, and other management tasks. 

After around 2 years of payments we sold the loan and went from a loss to a very nice gain. 

Savings rates through high yield savings accounts and CDs are almost at 5% (maybe 4% now) but they'll much more passive than real estate.

Would seller concessions benefit the seller in the form of capital gains reduction especially on flips?

You cannot (legally) exclude your capital gain when you sell your NJ house next year.