They are probably contractually bound with the auction company to carry out the auction, but it would at least put you in the front of their mind if the property doesn't sell at auction.

   $1.5MM25% Down would be $375KIt was suggested to me to speak with the owners (who I know - they are personal friends) about Owner Carry for $250K.Does this mean A) The $250K is subtracted from the original purchase price and therefore I would have to come up with 25% of $1.25MM  or..B) Out of the $375K down the owner would carry $250K and I would have to put $175K down on the deal ?

My concern is carrying  a hard money loan for 6 months waiting for the leases to expire. 

After you subtract rehab costs, carrying costs, closing costs etc - the average Net for a Fix & Flip after 6 months is $15,000.Are you willing to risk your home to try to beat those odds?

Any sort of non-conforming use carries greater risk than if you're in conformance.Duplexes and SFRs are appraised in the same way - comparable sales. 

If you were ok with taking on additional debt (loans your tenants would pay down for you over time), you could potentially leverage that 475k into 10 or more cash flow properties (though there are limits on how many loans you can carry at once).Of course, there's always a middle ground too: sell the condo, use some of the money to increase your DP on the new house and use the rest for investing.

Here's the technique I asked the homeowner if they could carry the financing for 6 months.

Posting via mobile app and though it looked spaced out prior to posting, it seems to not have carried over.

One of my best tenant/customers is a guy who draws a military pension and purchased a property from me on seller finance terms, I was willing to finance it for 10 years to make payments around the same as what rent would be, but he wanted to only carry it 3 years to pay off fast.

Once the now performing, modified note has a 12-24 month payment history, the note holder should have an asset with a significant capital gain.Note secured by commercial property carry rather light regulatory baggage.